PacLII Home | Databases | WorldLII | Search | Feedback

Court of Appeal of the Cook Islands

You are here:  PacLII >> Databases >> Court of Appeal of the Cook Islands >> 1984 >> [1984] CKCA 1

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Marine Resources (Cook Islands) Ltd v Solicitor General (No 2) [1984] CKCA 1; CA 01.1984 (18 October 1984)

IN THE COURT OF APPEAL OF THE COOK ISLANDS
CA. 1/84


BETWEEN


MARINE RESOURCES (COOK ISLANDS) LIMITED
APPELLANT


AND


MICHAEL CRAWFORD MITCHELL
as THE SOLICITOR GENERAL
RESPONDENT
(No 2)


Coram: Sir Thaddeus McCarthy (Presiding)
McMullin J
Jeffries J


Counsel: R.W. Holmes for appellant
M.C. Mitchell in person


Hearing: 12 September 1984
Judgment: 18 October 1984


JUDGMENT OF THE COURT
DELIVERED BY McMULLIN J


On 8 December 1983 the Chief Justice, Sir Graham Speight, entered judgment for the respondent, the Government of the Cook Islands, on a claim by the appellant against it for $1,737,000, and ordered the appellant to pay costs as on a claim for that sum. The order for costs alone involved a substantial amount as we were informed by counsel that scale costs may be fixed at 6% of the amount in issue. From the whole of that judgment the appellant now wishes to appeal and application has been made to the High Court for leave to do so. It is unnecessary to refer to the substance of that judgment, and we set out only so much of the steps taken in the litigation to date as are necessary to provide a background to a consideration of the questions currently before this Court.


Under Article 60(2) (c) of the Constitution Amendment (No. 9) 1980/81 an appeal lies to this Court from a judgment of the High Court where the matter in dispute on the appeal amounts to or is of the value of $400 or upwards. Section 54(1) of the Judicature Act 1980/81 provides that no appeal to the Court of Appeal, whether as of right or not, shall be brought except in pursuance of an order of the High Court granting leave to appeal: provided that, subject to subs (3) and (4) of the section, the High Court shall grant such leave in every case where the appellant is entitled to appeal as of right. Subsections (3) and (4) provide as follows:


(3) Leave to appeal shall be granted only on condition that the appellant within a period to be fixed by the High Court, not exceeding 2 months from the date of the hearing of the application, gives security to the satisfaction of that Court or the Registrar thereof in a sum to be fixed by the Court for the payment of the costs of the appeal:


Provided that, in the case of any appeal from a judgment of the High Court in the exercise of its criminal jurisdiction, the Court may grant leave to appeal without requiring the appellant to give security for costs.


(4) Where the Court grants leave to appeal on condition that the appellant gives security for costs, the order granting leave to appeal shall not be sealed until that security has been duly given.


The appellant duly applied for an order for leave to appeal against the judgment of the Chief Justice delivered on 8 December 1983 upon the ground that an appeal lay as of right under Article 60(2) (c) of the Constitution. On 22 February 1983 the Chief Justice made the following order on that application:


McFadzien

Mitchell


McF does not yet know whether the appeal is only against the quantum of costs or the full scale. Leave to appeal on following terms.


1. $5,000.00 in cash into Court to make up for the $5,000.00 which slipped thru Mr Mitchell's fingers at the previous hearing owing to the erroneous belief that the assets were worth $12,000.00.


2. No order for stay as the only assets available are in the hands of the Receiver. To save Mr Mitchell issuing a Bill Writ the Receiver is to sell all the assets and pay them into Court to carry out the spirit of the undertaking given prior to main hearing getting underway.


3. (a) If appeal is only as to costs then further security of $2,500.00 to be paid in;


(b) If full appeal, (sic) then security $50,000.00.


On 12 March 1984 the appellant applied for an order for leave to appeal against this last order fixing security for costs. Again it did so as of right pursuant to Article 60(2) (c). On 13 April 1984 a further and similar application for leave to appeal was made. However, this second application seems only to have duplicated that made on 12 March 1984 and adds nothing to the proceedings except to demonstrate the appellant's consistency of purpose. The application of 2 March 1984 was heard by Dillon J in the High Court and he, on 14 June 1984, refused leave to appeal. In doing so he accepted a submission by Mr Mitchell that an appeal from an order of the High Court fixing security for costs does not lie because such an order is within the sole discretion of the High Court; and he added that in any case there was no order to appeal against because in terms of s. 54(4) of the Judicature Act 1980-81 the order could not be forwarded to the Court of Appeal before it was sealed, and before it was sealed the security had to be paid.


The appellant on 17 August 1984 gave notice of appeal against the judgment of Dillon J, and sought an order enlarging the time prescribed by the Court of Appeal Rules 1981 for the filing of an appeal, and for a further order granting special leave to appeal to this Court from the judgment of the Chief Justice delivered on 8 December 1983. It alleged that an appeal lay as of right against the decisions of both the Chief Justice and Dillon J pursuant to Article 60(2) (c). Counsel for the appellant informed us that this notice of appeal was filed ex abundante cautela. In view of the decisions we reach on the other matters before the Court, no formal judgment needs to be entered on the notice.


What the appellant seeks to do on the various processes now before this Court is to secure a reduction in the amount fixed as security for appeal by the Chief Justice. It is not clear from the terms of the order fixing security which the Chief Justice made on 22 February 1984 whether the total amount payable or fixed as security for the full appeal (which we were informed the appellant intends to bring) is $50,000 or $55,000 but on the submissions made to us nothing turns on this point, nor is it necessary to consider the circumstances surrounding the making of the order that $5,000 be paid into Court as directed by the Chief Justice in para 1 of his order of 22 February 1984.


Mr Holmes submitted that the decision fixing security for costs was erroneous in that the Chief Justice failed to take into account Rule 23 of the Cook Islands Court of Appeal Rules relating to costs. However, he intimated that this rule had not been brought to the attention of the Chief Justice at the time the application for leave to appeal was heard. Rule 23 provides:


The costs of proceedings in the Court of Appeal shall be in accordance with the Second Schedule to these rules; but costs shall in every case be in the discretion of the Court of Appeal which may make such order as in the circumstances may appear to the Court to be just.


The scale of costs in the Second Schedule to the Rules provides for fees in respect of appeals involving sums in excess of $1,000 to be paid at the rate of $100 for drawing and settling the case, $150 for setting down and arguing the appeal to judgment, a sum not exceeding $100 for every day of hearing after the first and a sum not exceeding $75 per day for extra counsel, if certified for. So if the scale were strictly applied in the present case to a hearing lasting five days and involving one counsel, the costs would be $650. The scale is not, however, binding on the Court and both s. 73 of the Judicature Act and Rule 23 give the Court of Appeal a discretion in the matter of costs. It is likely that, having regard to the nature of the litigation and the magnitude of the claim, the costs awarded to the successful party on the appeal would greatly exceed the scale. However, when it is considered that security for costs is limited to "the costs of the appeal", we are bound to say that the amount fixed by the Chief Justice, be it $50,000 or $55,000, is so much in excess of anything that might be reasonably awarded for this purpose, as to entitle this Court to say that it was fixed in oversight of the scale and the prescription in s. 54(3) of the Judicature Act that the security required is for the costs of the appeal; not also the costs of the substantive action.


While the exercise by the High Court of its discretion under s. 54(3) may sometimes result in an appellant finding it difficult to meet the security fixed, the Court must always bear in mind that if too large an amount is fixed as security, an appellant may feel that he has been shut out from pursuing his appeal. The security fixed by the Chief Justice in the present case might very well do that. Insofar as s. 54(3) authorises security to be fixed for the payment of the costs of the appeal only, not for the proceedings in the High Court as well, the order made by the Chief Justice was, we think, made on an erroneous footing and is too substantial.


Mr Holmes suggested that, on his estimate of two days for the hearing of the appeal, a figure of $2,000 would have been a proper amount to fix as security. However, we think this amount would be quite insufficient having regard to the fact that the appeal is brought in respect of an action which took 14 days to hear in the High Court, and that, if it proceeds, it may well occupy a number of days in this Court. We think a figure of $7,000 would be appropriate.


Mr Holmes also submitted that the order made by the Chief Justice was invalid in that it failed to fix a time within which security should be given. Strictly this submission is correct, although if it had been the only point in issue application could have been made to the High Court to correct the judgment before it was sealed. In view of the decision we have reached on Mr Holmes' main argument we need discuss this submission no further.


We now turn to the appeal from Dillon J. In refusing leave to the appellant to appeal against the amount of the security fixed by the Chief Justice, Dillon J relied on some dicta in the case of Taitumu Marangataua and Ors v. Patena Kerehi and Anor [1912] NZGazLawRp 75; (1911) 30 NZLR 1049, a case decided under Rule 22 of the New Zealand Court of Appeal Rules which then provided:


Due security for costs, and for the performance of the judgment of the Court of Appeal, shall, within six days after the notice of appeal has been given, be given to the satisfaction of the Registrar of the Court appealed from, unless the Court of first instance otherwise orders; and if no such security is given, the notice of appeal shall be deemed abandoned.


In Taitumu's case Williams J. (presiding) said:


The fixing of the security under Rule 22 is, I think, limited to the Court of first instance. I do not think that there is an appeal from the decision of the Court of first instance in fixing the security. The rule seems to me to confer an absolute discretion on that Court. If it were the case that there was an appeal from the discretion of the Court of first instance it would mean this: that the time limited by the rules for appealing from the main decision in any case would be extended practically indefinitely. (p.1052)


Edwards J said:


I agree with the President of the Court that no appeal lies from the decision of the court of first instance upon application to vary the order of the Registrar as to security, or upon any application for a special order under the rules. It is quite clear, I think, that that is a matter that is entirely one in the discretion, and the absolute discretion, of the Judge of the Court of first instance, otherwise it would follow that the party not being satisfied with the judgment, by appealing from that discretion, could protract his time for appeal. That, I think, clearly cannot be done. (p.1055)


Dillon J applied these dicta in the instant case to hold that the High Court of the Cook Islands has a sole and absolute discretion in the matter, and that no appeal lay from the decision of the Chief Justice. Therefore he refused the application for leave to appeal against it.


We think that the dicta of Williams and Edwards JJ should not be taken as representing the law of the Cook Islands even if it remains the law of New Zealand, which we doubt. If there was ever a time when no appeal on an issue of costs alone lay to the Court of Appeal (as to which see Grimston v. Timms 18 WR 781) it has gone. We think the law is currently set out in the judgment of Viscount Haldane in Gray v. Ashburton [1917] AC 26 at 32:


My Lords, in the case of rules which govern the procedure of the Courts it is said that the costs are to be in the discretion of the Judge or the Court, but the very scheme of the Judicature Acts is that there should be an appeal from the Judge who awards the costs to a Court of Appeal. That Court of Appeal also may, therefore, have to exercise the discretion which the rule confers. The Court of Appeal has laid down the practice, which is a rule of practice and not of principle restricting legal power, that it will not interfere with the discretion exercised by a Judge of first instance in a matter in which the discretion is entrusted to him, such as costs. But the Court of Appeal only applies that limitation of its powers in cases where a Judge has acted, in exercising his discretion, on judicial principle and on the proper principle. There are many cases in which the Court of Appeal interferes with costs, and it is always free to interfere as regards costs if it thinks that the Judge has exercised his judicial discretion in a fashion that is not in accordance with settled principle.


This Court, too, has jurisdiction to interfere with orders for costs, although it will not exercise its discretion unless the Judge's discretion has been exercised on wrong principles, or is otherwise plainly wrong. Therefore we conclude that there was no need for Dillon J to be constrained by the obiter dicta in Taitumu's case and that it would have been proper for him to have granted leave to the appellant to appeal against the Chief Justice's decision because the appeal lay as of right. Nor do we think that s. 54(4) of the Judicature Act was a bar to the granting of leave to appeal against the decision of the Chief Justice. Section 54(4) is concerned with formal requirements only and does not go to jurisdiction. It requires an appellant to provide the security before sealing the order fixing it. It does not require him to do that before seeking leave to appeal against it. If indeed an appeal against the quantum of security could not be entertained until the security had been lodged, every appellant who wished to appeal against the amount of the security on the ground that it was excessive would first have to lodge in the Court that which he alleged to be excessive.


For these reasons we are of the opinion that there was no legal bar to Dillon J granting leave to appeal against the decision of the Chief Justice made on 22 February 1984. Accordingly we allow the appeal against his decision refusing the appellant leave to appeal against the decision of the Chief Justice fixing security for costs. We grant leave to appeal against that decision. The Chief Justice has granted leave to appeal against his judgment in the substantive action but on terms which cannot be sustained. Paras 1 to 3 of the order made by him are quashed; in their place there will be terms that the Appellant within six weeks from this date give security to the satisfaction of the High Court or the Registrar thereof in the sum of $7,000 for payment of the costs of the appeal.


Both counsel asked that in hearing argument on the appeals which we have already discussed, we should also hear argument on the question of whether, in face of the opposition of the receiver of the appellant company, the appeal is properly constituted. We were told that two of the three directors of the appellant company have authorised the bringing of the appeal. The third is overseas and cannot be located. However, the receiver is unwilling to grant his consent to the bringing of the appeal. Mr Holmes wishes to avoid having the evidence taken on the hearing of the substantive proceedings transcribed and the Case on Appeal prepared when, if Mr Mitchell's contention that no appeal lies because of the receiver's refusal to consent is correct, the appeal may be struck out without the merits of the case ever being considered. We can understand the justifiable concern of both counsel over this matter, but as we informed them at the hearing, we cannot entertain argument on this point when there is no application or supporting affidavit before the Court which puts it in issue.


Under RR. 27 and 29 of the Court of Appeal Rules an appellant has an obligation to lodge the record with the Registrar and it is only after this has been done that the Registrar will set the appeal down for hearing. The observance of such procedure would require the appellant to have all the evidence transcribed which is the very step which Mr Holmes understandably wishes to avoid in the meantime. There is, however, one way of meeting the problem. If the appellant files a motion and supporting affidavit which raises the point which counsel now wish to argue as a preliminary issue, and applies under the Rules for a waiver of compliance with them, we will, if counsel are now agreed, accede to the application and give our judgment on this point. We have intimated to counsel that we are prepared to have the argument on the point placed before us in written form.


There remains the question as to what is to happen to the security of $7,000 if, after it has been found, the appeal does not proceed. We record that counsel are agreed, that in that event the $7,000 is to be returned to the appellant, or security to be provided for it released to it and not the respondent. But we leave the final resolution of this matter until the preliminary point has been determined.


The appellant is allowed costs of $500 on these appeals together with disbursements to be fixed by the Registrar of the High Court.


SIR THADDEUS McCARTHY P
McMULLIN J
JEFFRIES J


Solicitors:
Short & Tylor, Rarotonga for appellant,
Crown Law Office, Rarotonga for respondent


PacLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.paclii.org/ck/cases/CKCA/1984/1.html