Friday, 30 October 2009

Supreme Court And Common Carriers

In a very recent decision Ports of Auckland Limited v Southpac Trucks Limited (SC 18/2009 [2009] NZSC 112), the Supreme Court has clarified the effect of the Carriage of Goods Act 1979. In a very lucid decision, the court overturned the Court of Appeal and restored a High Court judgment, which had itself overturned a District Court judgment. Justice Blanchard began with some praise for the drafters of this legislation and of the work of the Report of the Contracts and Commercial Law Reform Committee which recommended the new statute. He effectively considered that the research and drafting of the statute was a model of law reform, at least in part because of the use of persons with considerable insurance and commercial experience. I interpose to suggest that this may well be in contrast to much recent law reform which appears to derive from academic theory rather than experience at the coalface. The judgment itself is a model of clarity, and emphasises the purposive approach to interpretation of this statute. There is little recitation of previous case law, at least in part because Justice Blanchard refers to there being little need to approach the courts for interpretation due to the quality of the legislation drafting. The court went directly to the issues, without the need to conduct a detailed analysis, recognising that as the legislation had been designed to make the law of carriage of goods functional for the affected parties, then they should hold that what the carriers and insurers intended should be upheld. Incidentally I notice that the costs in the Supreme Court were 25% of the amount at stake. Some insurer was determined to break through the established meaning of the legislation, but in the end, came second.

Thursday, 22 October 2009

Supreme Court

I find it hard to believe that the Supreme Court has taken on a decision on a $63 medical fee. in Barr v New Zealand police SC 34/2009 on 21 October 2009 a ridiculous appeal from the District Court on whether Barr should have paid the doctors fee of $102.60 on his driving with excess blood alcohol conviction. Mr Barr considered that this was outside of the jurisdiction to order payment of medical expenses. He appealed on this ground to the High Court, who agreed, but then the matter went to the Court of Appeal, who held that the Costs in Criminal Cases Act did give jurisdiction. He then took this matter to the Supreme Court. In the meantime an amendment, which is not retrospective, was passed to regularise the position. While the courts cannot control the ability of parties to appeal, where they have such rights, I am astonished that the Supreme Court agreed to listen to this appeal. Even more surprising is that each party had two counsel in the Supreme Court. No doubt the parties say that it is an important point of principle. This must be rubbish because the conviction fine and disqualification of driving were not affected. It does not go to proof of the criminal charge, nor to the evidence. It does not even affect the admissibility of the evidence of blood alcohol content. Altogether, the appeal appears to have been a pointless exercise, no doubt detracting from time spent on more important appeals such as whether appellants should have received two years six months jail instead of three years two months. In the 1980s I recall Sir Owen Woodhouse commenting that the Court of Appeal was not there to tinker with sentences. In 2009 obviously the priorities have changed.

Monday, 19 October 2009

Construction Law Seminar

On Friday I attended the Society of Construction Law seminar on "Delays in Construction Contracts". The society has not previously run a full-day conference, but this was an outstanding success. The detail and work, and quality of the presenters and their papers thorough and very useful. The topic may sound arid, but delay means money. The methodology of calculating that claim is however a somewhat more complex than just making a money adjustment. The first speaker was from a very large construction company who gave a more general overview of the potential issues which arose from delay. Further speakers talked about the software used for programming, how certifiers should rule on claims for delay, the knotty issue of conditions precedent, the distinction between acceleration and expedition, owners rights for compensation with an emphasis on liquidated damages, and on entitlement to payment from a contractors view. Overall it was an interesting day and set a precedent which I hope the society will keep to.

Wednesday, 7 October 2009

Construction Contracts and Counting angels on Pinheads

Payment Schedules Again

It appears that knowledge of the requirements of the Construction Contracts Act is still not widely known, despite six years passing from the date it came into force. In addition, cases are being litigated in the District Court and High Court which could have been disposed of by a construction adjudicator much more rapidly and efficiently.

The recent Christchurch decision Foggo And Ors v R J Merrifield Limited 21 September 2009, Justice Christine French, HC Christchurch CIV-2009-409-000605, records the setting aside of a summary judgment obtained in the District Court, on the basis that the section 20 schedule was clearly inadequate, despite the more liberal approach encouraged by George Developments Limited v Canam Constructions Limited [2006] 1 NZLR 177. The history of the case was that the builder sent the owner a number of payment claims, with the usual time to respond. No schedule in the form in the Act was sent in reply, although a dispute was raised and a payment made on account. There were three principal errors in the payment claims provided by the builder to the owners. The first, which was an error in the heading, was that “payment of schedule” instead of “payment schedule” was used. This was considered not to be anything more than a typographical error. However the other two errors, proved fatal to the District Court judgment. The word "not" was erroneously included in the first line in two parts. These are worth quoting, and are as follows, emphasised:-

" If you do not respond to the payment claim by providing a payment schedule, but indicate in the…"

and the second:-

“If you do not respond to the payment claim by providing a payment schedule but do not pay the…”

The effect of this error was of course to make the payment claims confusing. While there was no evidence that the owner was confused, the court held that this was not important because of the effect of Welsh & Anor v Gunac South Auckland Ltd HC Auckland CIV-2006-404-007877, 11 February 2008, Allan J. In that case it was held that because the requirements of section 20 are mandatory, it is not necessary to then explore whether the errors did cause confusion. The errors alone were sufficient to make the payment claim bad. Justice Allan did consider in that case that some errors might not be fatal where the principal had not been misled or not in any doubt as to what was intended, giving as an example a failure to include the necessary statutory reference from the Act. This is in reality a restrictive view of the act, and with respect to the learned judge, not the sort of approach intended by the Court of Appeal in George Developments Limited v Canam Constructions Limited.

Although the building contract was for a residential dwelling house, it was clearly substantial because the total contract price appears to have exceeded $600,000. The payment claims referred to were numbers 12 to 15 and in common with most building disputes it was the payment for the end of the job which was left unpaid.

The owners did respond to the payment claim number 12 with an e-mail which the parties accept was sent on time if it was a schedule, but the builder challenged the form claiming it did not comply with the Act as a proper payment schedule. No proper response was made to the other three claims, but a payment of $70,000 was made on account, leaving about $100,000 owing. It was argued that the e-mail had to be read in the context of prior discussions, but regrettably there was little evidence as to what had been discussed. Justice French considered that the liberal approach in George Developments Limited v Canam Constructions Limited could only be adopted where there was evidence of prior written communications between the parties, so that the schedule could be read in the context of those discussions. In addition, she referred to the failure to indicate a final amount in the schedule, and following other decisions such as Westnorth Labour Hire Ltd v SB Properties Limited HC Auckland CIV-2006-404-001858, 19 December 2006, Rodney Hansen J, refused to accept the e-mail as an adequate schedule. Because the builder engaged in discussion about the email, the owners sought to raise an estoppel in relation to the subsequent rejection of the e-mail as a sufficient payment schedule, but this was also rejected by the judge.

The case illustrates a tension between the clear intention of the Court of Appeal in the George Developments Ltd v Canam Construction Ltd, that a relatively liberal approach should be taken to the documentation, and the particular approach taken by this judge. I rather doubt that the owners ever read the fine print in the payment claim. It would have been clear, or should have been clear, that they had a certain period of time to respond, and had a proper form to use if they wished to respond with a schedule. The errors in the payment claim did not inhibit them from responding by their email, and really answers the issue of whether they were confused. The addition of the words was clearly the same sort of typographical error as the name on the form. It may be that rejection of the email as the schedule was intended to be a consistent strict approach. With respect, her approach is too particular and narrow. If we are to have a practical construction litigation procedure, this sort of approach is unhelpful. But, anyone building a house of this value should be aware of the time periods in the Act and the required forms.

In the end, the summary judgement was set aside and the matter referred back to the District Court. The payment claims were dated in 2006. If the parties had engaged in a construction adjudication in 2006, they would have had a result in 2006 rather than being in the unsatisfactory position of a partial result in 2009.

Monday, 5 October 2009


The previous Labour government proposed setting up a sentencing council to advise the judges on guidelines for appropriate sentences. With the change in government last year, the sentencing council concept was scrapped. Reminding us again that the Court of Appeal is just across the road from Parliament, the full Court has taken it on themselves to become the sentencing council, which was probably their job in the first place. In the recent decision of R v Hessell CA170/2009 [2 October 2009], a full court has said that the Court of Appeal has resumed issuing guideline judgements and began with the effect of guilty pleas upon a sentence. The case itself is a rather sordid sexual escapade involving drink, speed and girls aged 14 and 15. The girl's mother and her partner initiated a drink fuelled sexual orgy with the girls. The mother and her partner were both charged, but the mother pleaded guilty early on in the piece. The partner only pleaded guilty in a few days before the trial was due to commence. He appealed a sentence of two years eight months imposed by Justice Heath, at least in part because the mother received a sentence of less than imprisonment, 12 months home detention. The disparity of the sentence was then attacked. The appeal was unsuccessful, not perhaps surprising considering the experience, and realistic approach from Justice Heath. However the Court of Appeal considered it was time to provide guidelines on the correct approach for discounts for pleading guilty. In doing so, the court has made a number of comments on judicial discretion in sentencing, effectively fettering the discretion of the District and High Court. This appears to have been a deliberate decision, because there is much discussion in the decision of the wide sentencing discretion formerly available to the judges. This can be summed up in a quote "The passage of the Sentencing Act 2002, with its insistence on a highly structured approach to sentencing, signalled the need to review unfettered discretions and effectively rendered the traditional approach to guilty pleas untenable. In particular, s 8(e) of that Act established as a fundamental principle of sentencing that like cases must be treated alike, so far as possible, and s 9(2)(b) identified a guilty plea as a discrete mitigating factor." Or in other words do as we say. It is a common feature of criticisms of sentences that the judge has got it wrong-too light/too heavy. If the judges are able to respond by saying Parliament has now prescribed this Act, and the Court of Appeal has told us the guidelines made under the Act, then they have an answer to the criticism, that they are just following what has been decided, or applying stare decisis.

The particular guidelines are the allowance for pleading guilty, and the appropriate discount for doing so. It seems that nodding to the charge at the first opportunity is of most benefit, but if you leave the admission to the day of the trial, then this may not have an effect on the sentence. I am reminded that back in the 19th Century, trials often took place only days after arrest. If you read contemporary accounts, the juries were assembled very quickly. It is only in the days of the strike out for delay between arrest and trial, that the discounts gain traction. Essentially the best discount is a third for the first opportunity. This falls to 20% at a status hearing or first call of an indictment, and down to 10% up to 3 weeks before trial. However remorse is not to be a separate factor. In what may be seen as a cynical analysis of the sincerity of remorse, the court distinguished this saying "we acknowledge that exceptional remorse, demonstrated in a practical and material way, can attract its own reward."

The point made is that administrative convenience is creeping into the way in which crime is disposed of. I have previously expressed concerns about over prosecution. Care will need to be taken in sentencing someone, who has delayed a guilty plea because of enthusiastic over prosecution, and if the correct charges were used, would have pleaded at the beginning. And I do wonder about remorse. It is often very important to the victim, that there is remorse. While it may be apparently easy to say you are sorry, anyone with experience of children will know the difference between genuine contrition and the curt teeth gritted version. A wise older lawyer taught me the need to express remorse at an early stage when dealing with professional disciplinary charges, and how this can deflate the heat of a complaint. I think it is much harder to say you are sorry then the Court of Appeal would accept.


Thursday, 1 October 2009

Blue Chip

The recent decision about the Blue Chip investment scheme comes as no real surprise. The sad feature is the naiveté of the investors, and the callous way in which so called financial advisors and lawyers failed in their duties to ensure that the Bartles (the investors) were properly advised of the risks of the transaction. The reality about the Blue Chip scheme, as with many others, is that if it looks too good to be true, then it is- and should be avoided. Many older people find themselves with a home and savings but only a small fixed income. They seek to maximise their investment, but often fall foul of the snake oil salesmen. There is some move to professionalise those who call themselves financial advisors, but of course Mr Mathias, the lawyer involved, should have known better, and is already a Law Society member. Just being qualified and in a professional body, is clearly not enough. People must become more financially aware, and there is less excuse than years ago when fewer were educated and did not have television/internet to provide easily obtainable information. The search for quality investments is difficult, and the stock market only works for the astute and lucky. Bank deposit rates are low, and finance companies have collapsed in bulk. Even investment companies like ING have had to freeze and settle up with investors. I don't know the answer myself. If I did I would be rich-and I always look at financial advisors to see if they are rich, and taking their own medicine. Perhaps the answer is to spend until you drop dead. It may be more fun that way.