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No jurisdiction without service: difficulties obtaining interim injunctions against offshore companiesNew Zealand | 02 April 2019
The High Court recently dismissed an interim injunction against Viagogo AG, holding that it did not have jurisdiction to consider and determine the application without service on Viagogo. The case clarifies that the courts will not overlook the requirement for service and highlights the difficulty of seeking an interim injunction against companies that are based overseas.
The Supreme Court recently considered the liability of those associated with the 2004 Feltex Carpets initial public offering of shares under NZ securities legislation. The decision is a useful determination of a number of securities law liability issues in the NZ context. Among other things, it has clarified that an untrue statement for the purposes of Section 56 of the Securities Act need not be misleading to a material extent to be untrue.
A recent High Court decision adopted the perspective taken in the United Kingdom and Australia on the contractual penalties rule, shifting focus from a comparison between secondary obligations and genuine pre-estimates of damage caused by breach to comparing secondary obligations and the innocent party's performance interest. The decision confirmed the continued relevance of Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd but not the rigour of its application in earlier cases.
No costs entitlement without lawyer's invoice – parties using in-house lawyers lose entitlement to costsNew Zealand | 17 July 2018
Since 1983 it has been the position in New Zealand that a party can recover costs in cases where it has been represented by a lawyer that it employed. However, a recent Christchurch High Court decision held that this is no longer the case. The decision will have a significant impact on entities which are routinely represented in court proceedings by in-house lawyers.
The Supreme Court recently considered a judicial review application about the length of runway end safety areas under a proposed runway extension. Users of the airport might be reassured by the Supreme Court's finding that, under the existing statutory regime, more than a cost-benefit analysis is required; among other matters, a mandatory consideration includes the need to improve aviation safety.
The Supreme Court recently reversed a Court of Appeal judgment that a local authority did not owe a duty of care to a commissioning owner in issuing a code compliance certificate for a non-compliant building. The judgment is significant because it recognises that local authorities owe a duty of care even to commissioning owners that engage their own professionals to ensure compliance with building standards.
The Supreme Court recently issued a somewhat controversial decision of significance in the area of litigation funding. The decision contains guidance on the key question of whether a funding agreement amounted to an impermissible assignment of a bare cause of action that would constitute trafficking in litigation. It remains to be seen whether, and to what extent, the decision may be used by defendants seeking to challenge funding agreements.
The Evidence Amendment Act 2016 came into force in January 2017 and is the fourth and most substantial amendment to the Evidence Act since its introduction in 2006. Most of the amendments relate to evidence in criminal proceedings. However, several amendments are relevant to civil proceedings. The amendments relate to the definitions relevant to the application of privilege, legal advice privilege, settlement privilege, prior consistent statements and the prohibition on using previous decisions as evidence.
The Supreme Court recently clarified the law applicable to unused registered trademarks in New Zealand and limited the scope of protection afforded to trademarks under the Trademarks Act 2002. The decision will affect companies which have sought to expand the protection available under the act by acquiring, but not actually using, trademarks that resemble their own purely to prevent other traders from using them.
The New Zealand Court of Appeal recently had to determine whether late payment fees of A$28 million on a 60-day loan of A$37 million were an unenforceable penalty according to the law of New South Wales, Australia, which was the law of the contract. Although the judgment addresses the law of New South Wales, it offers some insight into the New Zealand court's view of recent international developments on penalties.
The High Court recently ordered that a substantial amount be provided as security for costs by a litigation funder in relation to claims brought against seven defendants. The fact that the litigation was being funded by a third party was a significant consideration in the determination that the plaintiff could not pay costs itself and the exercise of the court's discretion to order that security be provided.
The Supreme Court recently upheld a ban on smoking in public mental health facilities, ruling that the ban did not breach patients' rights, even of those compulsorily detained on the property. The court held that there was no requirement under the Smoke-free Environments Act to provide a dedicated smoking room, and rejected the appellant's claim that the smoking prohibition infringed a number of rights under the Bill of Rights Act.
The High Court recently aborted the trial of four company directors of two failed finance companies after the prosecution disclosed an unprecedented number of previously undisclosed documents at an advanced stage of the trial. The court's careful examination of the principles for aborting a single-judge trial will be useful in similar cases, in light of the fact that, because complex commercial criminal cases involve immense numbers of documents, disclosure failures can occur.
The Court of Appeal recently upheld a High Court declaration that a prohibition on prisoners voting is inconsistent with the Bill of Rights Act. The case is significant in its finding that the courts have jurisdiction to make declarations of inconsistency. Although the courts have, from the time of the act's enactment, been committed to granting remedies where possible to vindicate rights, they have declined earlier applications for declarations of inconsistency.
The Court of Appeal recently held that a local authority did not owe a duty of care to a commissioning owner in issuing a code compliance certificate for a non-compliant building. The decision is significant because it restricts the circumstances in which local authorities have a duty of care in relation to defective buildings, especially to commissioning building owners which contract with their own professionals to ensure compliance.
Restricted scope of judicial review for government procurement decisions restored by Court of AppealNew Zealand | 25 April 2017
The Court of Appeal recently reversed, on appeal, a High Court judgment setting aside the Ministry of Health's decision to award problem gambling services contracts to parties other than the applicant, the Problem Gambling Foundation, a major incumbent provider. The decision is important because it significantly decreases the likelihood of unsuccessful bidders being able to use the government procurement rules to set aside procurement decisions.
Unlike other common law jurisdictions, New Zealand has not legislated to extinguish or restrict the torts of maintenance and champerty. Nonetheless, the courts have adopted a pragmatic approach to the management of third-party funded litigation, which recognises the benefits of third-party litigation funding in promoting access to justice, while leaving certain issues arising under the torts of maintenance and champerty for determination in the context of an actual claim of that nature.
The Court of Appeal recently reviewed important aspects of liability under New Zealand securities legislation. The decision is a useful confirmation of a number of securities law liability issues which have been gradually clarified through a series of cases following the collapse of most of New Zealand's finance companies during the global financial crisis. It also offers guidance on the approach to retrospectivity, a concept which is notoriously difficult to apply in some cases.
The Supreme Court recently reversed a Court of Appeal decision, holding that Mobil Oil NZ Ltd was not responsible for remedying the contamination of land that it and its predecessors had occupied from 1925 to 2011. The Supreme Court ruled that the clause requiring Mobil to keep and deliver up the premises in good order did not extend to a requirement for it to remediate the subsurface of the land.
A recent Supreme Court decision provides guidance on the determination of the reasonableness of fees charged by finance companies in consumer credit contracts. The case illustrates how the broadly formed reasonableness standard and the provisions for determining the reasonableness of fees could lead to differing views on compliance. This is of particular concern as creditors are exposed to criminal charges for breach of the provisions.
The High Court recently ordered an internet cloud storage company to disclose user information to Kazakhstan for use in a US proceeding. The judgment provides a useful overview of the principles considered by courts when faced with requests for assistance from foreign courts and fuels discussion around balancing the provision of information with local privacy legislation against a background of increased public awareness of the impact of hacking.
The Court of Appeal recently upheld the High Court's decision banning smoking on all properties owned or controlled by the Waitemata District Health Board. The grounds of appeal were that the policy was illegal, it had been adopted without taking into account relevant considerations and it breached a legitimate expectation and violated rights and freedoms contained in the Bill of Rights Act.
The High Court recently ruled that a police warrant to search a journalist's house, and consequently the search itself, was unlawful. The judgment offers useful comment on the importance of disclosure by law enforcement agencies seeking warrants, particularly where journalistic privilege is concerned. However, it does not address the question of who is a journalist, or what journalism is, for the purposes of the privilege.
The Court of Appeal has held Mobil Oil NZ Ltd liable for the cost of remedying hydrocarbon contamination of land that it has occupied since 1925. The issue before the court was whether an obligation in a 1985 lease that required Mobil to deliver up the land "clean and tidy" extended to the remediation of subsurface contamination, including contamination that had occurred long before the lease period.
Two recent High Court decisions delivered conflicting results on the ability of the Financial Markets Authority to bring about a company's forced de-registration from the Financial Service Providers Register. Both cases involved appeals against proposed de-registration by a financial services company that was registered in New Zealand, but had its substantive operations offshore and no New Zealand customers.
The High Court recently ruled that holders of official information are not justified in taking a blanket approach when responding to requests for official information. The judgment confirms the primacy of open government and access to information under freedom of information legislation, but also the limits to the courts' ability to review the substantive merits of a decision to withhold information in a particular case.
In 2010 and 2011 the Canterbury region suffered several major earthquakes, resulting in severe destruction. The insurance industry has spent the following years dealing with unprecedented property claims. The Supreme Court and the Court of Appeal recently decided a number of important cases regarding earthquake insurance which will shape New Zealand insurance law for decades to come.
The Ministry of Business, Innovation and Employment's rules on government procurement decision making recently featured in a successful judicial review application to set aside a Ministry of Health contract award following a request for proposals process. The court confirmed that cabinet-imposed procurement rules will be strictly applied and that non-complying decisions may be set aside.
A recent Supreme Court decision has clarified the meaning of Article 8(1) of the Arbitration Act and resolved how agreements to arbitrate disputes under a contract should be construed where the existence of a genuine dispute is unclear. This decision set a precedent that when a party to an arbitration agreement attempts to bring court proceedings, the court must stay the matter and refer it to arbitration.
Two recent cases from the senior appellate courts have confirmed and restated the test for liability of lawyers who negligently advise on property transactions. The courts have affirmed that a stern test should be maintained in professional negligence claims by clients. Disgruntled clients will have to show that, had they been properly advised, they would have changed their course of action.
When a marriage or relationship breaks down and there are significant assets in trust structures, bitter disputes and attempts to access those trusts can result. The issues often focus on whether the trust was established as a sham. However, a recent Court of Appeal case has created media and professional consternation with its finding that assets placed in trusts might be scrutinised in different ways too.
Awards of interest on top of a proved sum of damages or debt owed remain a highly discretionary item for the court in each case, although that may be set to change. A 2014 Supreme Court decision has somewhat relaxed the restrictions on awards of interest, while Parliament is expected to extend and reinforce this approach via statutory changes in the Judicature Modernisation Bill.
The leader of the Conservative Party successfully obtained an urgent interim injunction preventing MediaWorks from screening a Saturday morning political debate in which he did not participate. This is the latest occasion in New Zealand where politicians have sought to use judicial review, combined with urgent injunctive court orders, to force media organisations to include them in election coverage.
The Court of Appeal has overturned an earlier decision not to extend the registration of the US restraining orders regarding Kim Dotcom, his associate Bram Van de Kolk and their company Megastuff Limited. Further, the court rejected an application by Dotcom's estranged wife to have her assets separated or excluded from the restraining order.
For the first time, the New Zealand courts have directly considered the interrelationship between cross-border insolvency and admiralty claims. The case arose from a foreign administration order that was recognised by the New Zealand High Court as a qualifying foreign proceeding and therefore operated as an automatic stay of proceedings in New Zealand. However, the court allowed the claimants to continue their admiralty claims.
The last participant in an international freight forwarders' price-fixing cartel has finally been dealt with by the High Court in a case that confirms New Zealand's approach towards negotiated settlements and agreed penalties in these quasi-criminal prosecutions brought by a regulator. New Zealand courts remain quite content to endorse this type of 'plea bargaining' approach, despite recent Australian trends questioning it.
The High Court recently considered its ability to annul or modify charterparties that are entered into under duress, within its admiralty jurisdiction where the terms of the charterparty are inequitable and construed under the International Convention on Salvage 1989. The dispute underlying the decision arose from the October 2011 grounding of the MV Rena off the New Zealand coast.
The Supreme Court has imposed disclosure requirements on plaintiffs whose legal costs of pursuing the claim are covered by a third-party litigation funder. The disclosure required by the Supreme Court is likely to lead to more defendants seeking security for costs when they are notified that a funder is involved or applying for a stay on the basis of abuse of process.
New Zealand, like many other jurisdictions, has been grappling with the new legal issues arising from the upsurge in communication online. An area that has recently received attention is the extent to which a person or entity that hosts or republishes content created by third parties online can be held liable for defamatory content generated by users. Two recent High Court decisions have clarified the approach in New Zealand.
Following two recent decisions which held that the imposition of a smoking ban in prisons, first by amending prison rules and subsequently by amending regulations, was unlawful, the High Court has upheld the lawfulness of a policy banning smoking on all properties owned or controlled by a district health board. The contrasting outcomes provide a useful illustration of the approach taken in judicial review in New Zealand.
The introduction of a smoking ban in prisons has resulted in the airing of some interesting legal and constitutional issues. The lawfulness of the manner in which the ban was introduced was successfully challenged by a prisoner, and the government's legislative response to the High Court's decision has since provoked both a further successful legal challenge and criticism from a constitutional perspective.
The New Zealand Law Commission has released a report on its review of the legislation establishing New Zealand's court system. The commission was charged with reviewing the legislation with a view to modernising and consolidating it into a single statute. The report contained a number of recommendations, many of which will be adopted in new court legislation to be introduced later in 2013.
During the 2011 general election the National Party campaigned on an economic policy that would bring about the partial sale of five state enterprises. Following its election, the government began the process of restructuring the crown's ownership of these state enterprises. A recent Supreme Court decision has cleared the way for this crown sale of shares.
A recent Supreme Court decision addressed the interplay of contractual and tortious liability in New Zealand, as well as the appropriate measure of damages for breach of contract. The decision shows that courts will not readily excuse parties whose negligence induces entry into a contract, even a public body such as a district council.
In crowded competitive markets, a sharply focused comparative advertisement can make a real impact with viewers, particularly where it highlights lower pricing. However, comparative advertising carries risks if not done well and provides a fertile source of disputes. A recent case shows how the courts have grappled with the right approach to take to advertising, and is a reminder of the level of care that advertisers must take.
The New Zealand Commerce Commission has increasingly sought to bring court proceedings under the Commerce Act 1986 regarding cartel conduct by parties that do not ordinarily reside or conduct business in New Zealand, or that do so only through a local subsidiary. Recent cases show a determination to hold foreign parent companies liable for competition law breaches carried out through their New Zealand offspring.
The Supreme Court has held that a woman who became pregnant following a failed sterilisation had suffered a "personal injury" caused by medical misadventure, for which she was entitled to cover under the state compensation scheme. As a result, the woman could not sue the medical professional who was responsible. The decision is a reversal of an earlier Court of Appeal decision.
The High Court has recently ruled that warrants used by the New Zealand police to undertake a search of the New Zealand residence of Kim Dotcom, founder of Megaupload, on behalf of the US government were unlawful and that the conduct of the police exceeded what would have been permitted even if the warrants were lawful.
A recent judgment extended the protection afforded to lien holders when the property subject to their lien is arrested. The court held that an application for arrest by a possessory lien holder and the subsequent handover of possession of the vessel to the admiralty registrar did not destroy the possessory lien, so that the lien holder was entitled to priority payment from the proceeds of sale of the vessel ahead of other claimants.
The much-publicised sale of a group of New Zealand farms to an overseas company has been stalled by a judicial review decision of the High Court. Consent had been granted by the ministers of finance and land information on the recommendation of the Overseas Investment Office, but the court overturned the decision, finding that the office and the ministers had misdirected themselves regarding a key test.
A new set of High Court discovery rules has been designed to reduce the often disproportionate cost of discovery - a matter of increasing concern in New Zealand and other common law jurisdictions. Key features include a new standard for discoverability, a presumption in favour of electronic exchange and the creation of an express obligation to preserve documents.
The director of Maritime New Zealand has been declined leave to appeal to New Zealand's highest court in relation to the reinstatement of a safe ship management company. Owners of vessels are primarily responsible for the safety of such vessels; however, commercial vessels must also be registered with a safe ship management company, which periodically inspects and surveys the ship.
The District Court Rules 2009 introduced a new regime for claims, which radically departed from traditional civil procedure. Almost 18 months after their commencement, it is clear how dramatically these rules have affected civil litigation. The interlocutory warfare that was common in traditional civil procedure has made way for a process that is strongly focused on early settlement.
The Trans-Tasman Proceedings Act is intended to support closer economic ties with Australia through commercial regulatory enforcement, and aims to make it easier for individuals and businesses to resolve trans-Tasman legal disputes through the courts. Trans-Tasman litigation will be different from New Zealand litigation involving parties in other countries.
The High Court recently confirmed that the statutory two-year limitation period for claims arising out of vessel collisions applies whenever the proceeding is one in which the High Court has admiralty jurisdiction. The new Limitation Act 2010 does not contain an exclusion for claims enforceable in rem and the six-year time limit will apply to such claims unless a more specific limitation applies.
Following the appointment of a judicial conduct panel to inquire into certain conduct by a judge of the Supreme Court, the judge brought a judicial review application to challenge the legality of the judicial conduct commissioner's recommendation that a panel be appointed, as well as the subsequent appointment. The High Court considered the applicable standard for deciding when a judge's conduct may warrant removal.
A recent Supreme Court decision suggests that the best way to enable courts to interpret contracts in such a way as to give effect to the common intention of the parties is to allow reference to post-contractual conduct, and to leave the scope of the evidence to be policed by the courts on a case-by-case basis, using relevance as the touchstone.
A judge of the Supreme Court, New Zealand's highest court, has brought a legal challenge to an inquiry into his conduct. Among other things, the inquiry arises from allegations about the way in which he disclosed a business relationship with counsel for one of the parties to a case that he heard when he was a judge of the Court of Appeal.
The Supreme Court recently considered the use of evidence of prior negotiations in contract interpretation. It was the court's first opportunity to consider the issue in detail since the House of Lords decision in Chartbrook Ltd v Persimmon Homes Ltd. Overall, the case seems to signal an increasingly liberal approach to reference to negotiations.
The High Court was recently required to construe the word 'spouses' in the context of the Adoption Act 1955. The case illustrates the complexities involved in resolving the tensions in the statutory construction of a 35-year-old piece of social legislation in light of the Bill of Rights Act and a pattern of subsequent Parliamentary inaction in respect of the provision in question.
A controversial Court of Appeal decision on the interpretation of the Carriage of Goods Act 1979 has been overturned by the Supreme Court. The reversal restores the previously accepted position: carriers are protected by the act and carriers that subcontract aspects of carriage to others do not lose the protection of the act by doing so.
The High Court recently considered whether the inspection of discovered emails extends to email attachments. Most of the conceptual difficulties that arise from the discovery of emails stem from treating a email printout as the document itself, whereas an email - viewed as an electronic document - should be taken to include all of its elements, including attachments and reproduced copies of preceding emails.
New procedural rules for district court claims will require practitioners to alter their approach and advice. Interlocutory warfare will cease, with only interlocutories that are considered genuinely necessary being allowed, and most claims will no longer require formal discovery. An emphasis on judicial settlement will place greater emphasis on a practitioner's ability to conclude settlement negotiations successfully.
The High Court has refused to grant declaratory relief to a judicial review claimant, although the claimant had successfully established grounds for review, had demonstrated prejudice and would normally have been entitled to a remedy. Some of the court's reasoning is disturbing and sits uneasily with the accepted view of the division of powers and the role of the courts in construing and interpreting legislation.
The Supreme Court has recently clarified the circumstances in which New Zealand's competition regulator can exercise its information-gathering powers. It held that the Commerce Commission cannot issue an information-gathering Section 98 notice and have its power to do so judged retrospectively by reference to what it may discover from a 'fishing expedition' under that notice.
The High Court recently considered the discovery obligations of parties to litigation with regard to the correct treatment of emails forming part of an email chain. The decision addresses the question of whether an email chain is a separate document in itself or part of a single document.
The High Court has ruled that substituted service could be made on a defendant overseas on the social networking website Facebook, as newspaper advertising could not be effectively targeted. This is the first time that the New Zealand courts have allowed the service of proceedings on Facebook, but it follows a decision by an Australian court allowing service of a default judgment on the website.
New High Court procedural rules have come into effect. The significant amendments for international practitioners include changes to the rules on the service of persons outside New Zealand and the court's increased powers to grant interim measures in support of overseas judgments. More substantive changes in relation to case management, evidence and judicial review are expected soon.
In the first case of its kind, the High Court fined an individual NZ$100,000 for being an accessory to the sending of spam emails in breach of the Unsolicited Electronic Messages Act. However, the available penalties are unlikely to deter spammers if the commercial rewards are as great as this case indicates. Moreover, it remains to be seen whether the act may be given wider extraterritorial application.
The Court of Appeal has reversed a decision - in a case arising from a failed sterilization operation - that pregnancy is a compensable personal injury under the Injury Prevention, Rehabilitation and Compensation Act. The existence of cover under the act is a procedural bar to civil claims for injury, so the decision will allow for civil damages claims against a doctor or hospital in such cases.
Until recently, it was unclear whether the principle of indefeasibility of title extended beyond the registered memorandum of an all-obligations mortgage to an unregistered loan agreement recording the debt that it secures. The Court of Appeal has ruled in a preliminary case that such collateral documents are not indefeasible unless they are sufficiently incorporated into the registered memorandum.
The High Court recently had to resolve the inherent conflict between the aims of the Official Information Act 1982, which was enacted in order to make official information freely available, and those of the Privacy Act 1993, which was enacted to protect personal information from disclosure. It construed both acts and ruled that the former prevails over the latter.
The Evidence Act 2006 largely codified New Zealand’s common law evidence rules. However, as a result of late changes, legal professional privilege did not attach to legal advice obtained from overseas practitioners, which left open the risk of such advice being discoverable in New Zealand proceedings. A recent order in council extends privilege to communications with practitioners from 87 countries.
When considering whether a contract is unconscionable, should the question be asked with reference to the time of entry into the contract or the time when the contract became unconditional? The Supreme Court of New Zealand recently adopted the former approach, reversing that taken by the High Court and the Court of Appeal.
The High Court of New Zealand has reviewed the state of abortion law and the rights of the unborn, an area which it aptly described as "socially divisive". The applicant sought judicial review of the actions of the Abortion Supervisory Committee, claiming that the committee was failing to ensure that the statutory test for lawful abortions was being properly and consistently applied.
The Evidence Act 2006 was designed to simplify the law of evidence, but one of its unintended changes affects legal professional privilege as it applies to legal advice obtained from practitioners outside New Zealand and Australia. The risk of such advice from overseas practitioners being discoverable in proceedings is deeply worrying, but no remedial action has yet been taken.
The High Court has reversed the Commerce Commission's decision to reject clearance applications by New Zealand's two supermarket competitors to acquire shares in the country’s leading general merchandise trader. The court was critical of the commission's conclusions and the evidence on which they were based. The commission has been granted leave to appeal to the Court of Appeal.
Tech, Data, Telecoms & Media
The EU General Data Protection Regulation (GDPR) will come into full effect on May 25 2018 and will impact New Zealand businesses that do business with EU residents or entities or have a presence in the European Union. In addition, the privacy commissioner recently released a report recommending that the Privacy Act be substantially amended (including to comply with the GDPR) and the Ministry of Justice has indicated that privacy reform is a key initiative.