IN THE Court of appeal OF new Zealand

I TE KŌTI PĪRA O AOTEAROA	
 CA71/2020
 [2020] NZCA 212

	
BETWEEN	
FOREST HOLDINGS LIMITED
Applicant	
	
AND	
MANGATU BLOCKS INCORPORATION
Respondent	

Court:	
Clifford and Goddard JJ	

Counsel:	
M D Branch and K F Shaw for Applicant
Z G Kennedy and M D Toulmin for Respondent	

Judgment:
(On the papers)	
4 June 2020 at 11.30 am	

JUDGMENT OF THE COURT

A	The application for special leave to appeal to this Court is declined.
B	The applicant must pay the respondent costs on a band A basis, with usual disbursements.
____________________________________________________________________

REASONS OF THE COURT

(Given by Goddard J)
[1]	Forest Holdings Ltd (FHL) seeks special leave under cl 5(6) sch 2 to the Arbitration Act 1996 to appeal to this Court from a judgment of the High Court dismissing FHL’s appeal from an arbitral award.  Leave to appeal to this Court was refused by the High Court.  
Background
[2]	The dispute between the parties has a lengthy history.
[3]	In 2003 Mangatu Blocks Inc (Mangatu) entered into an agreement with FHL which granted FHL a forestry right on land owned by Mangatu (the Agreement).  On 10 July 2013 Mangatu purported to terminate the Agreement with immediate effect because FHL was in breach of certain obligations under the Agreement relating to compliance with the Resource Management Act 1991 (RMA) and reporting to Mangatu.  However, Mangatu was not entitled to give such a notice.  Rather, Mangatu was required to give FHL 120 days’ notice requiring it to remedy those defaults.  Mangatu was entitled to terminate the Agreement only if FHL failed to remedy the defaults within that 120-day period.  FHL treated the notice as a repudiation of the Agreement, and cancelled.  
[4]	FHL claimed damages for wrongful repudiation of the Agreement.  The parties referred the claim to arbitration before the Hon B J Paterson QC.  On 8 June 2016 the arbitrator delivered an award in which he concluded that:
(a)	Mangatu had wrongfully repudiated the Agreement.
(b)	FHL accepted the repudiation and cancelled.
(c)	FHL was entitled to have its damages claim considered.   
[5]	The arbitrator also found that FHL could not have remedied, within 120 days of 10 July 2013, certain breaches of the Agreement arising out of breaches of the RMA involving failure to comply with conditions of the resource consent that governed FHL’s logging activities.  
[6]	On 29 July 2016 the arbitrator delivered a further award in which he held that “the prospects of FHL obtaining other than a nominal damages award on its capital loss claim appear to be minimal”.
[7]	FHL sought permission to appeal from this award to the High Court.  Heath J granted leave to appeal on the following issue:
Having regard to binding findings of fact set out in the [award] of 8 June 2016, did the arbitral tribunal correctly determine the legal basis on which Forest Holdings Ltd was entitled to seek damages resulting from [Mangatu’s] unlawful termination of the forestry right?
[8]	On 15 March 2017 Heath J allowed the appeal by FHL and set aside the arbitrator’s further award dated 29 July 2016.  Questions of damages were remitted to the arbitrator.  The Judge considered that a factual inquiry was required into what would have happened if Mangatu had not repudiated, but instead had given the 120‑day notice to FHL to remedy its breaches as provided for in the Agreement.  He said:
[38]	Although the arbitrator has found that Forest Holdings could not have remedied the breach within the period of 120 days for which notice was required, the commercial dynamics between two contracting parties are very different during a period of notice than those that pertain when one party has decided to end the contractual relationship and has asserted an immediate termination.  Even assuming (which has not yet been the subject of a finding of fact) that Mangatu had issued a notice on 10 July 2013, there was still time for Forest Holdings to negotiate.  
[39]	By way of example:
(a)	If Forest Holdings had begun negotiations with Mangatu immediately after receipt of the notice, it might have been possible for some solution to have been reached which meant that Mangatu agreed to withdraw its notice.
(b)	If Mangatu had not withdrawn the notice, Forest Holdings might have gone into the market to find a solvent assignee prepared to acquire the bundle of rights that it held for value.  If the proposed assignee fell within the category of person in respect of whom Mangatu could not “unreasonably withhold” consent, Forest Holdings might have realised some benefit.
[40]	I am not saying that Forest Holdings could or could not establish the type of factual foundation that I have mentioned.  The point is that it must have the right to explore those issues and to adduce evidence to support any options available to it to maximise its recovery.  In other words, Forest Holdings is entitled to adduce evidence of the value of the rights of which it was deprived by the repudiation.  While the two aspects of the business dynamics to which I have referred are not intended to be exhaustive, they illustrate that Forest Holdings might have been able to extract value from its asset before the contract was cancelled.  From a practical point of view, apart from anything else, Mangatu could not have evicted Forest Holdings from the forest land until the notice had expired in circumstances where the defaults had not been remedied.
[41]	On the face of it, there appears to be room for a respectable argument that Forest Holdings possessed an asset of value to it at the time notice ought to have been given.  In those circumstances, I do not think it can be said, on a “first principles” analysis that Forest Holdings was unlikely to obtain more than nominal damages for Mangatu’s wrongful repudiation of its contract.
(Footnotes omitted).
The Damages Award
[9]	The case returned to the arbitrator.  On 7 September 2017 he delivered an Amended Ruling on Damages Issue in which he set out the task that he understood he was required to undertake in light of the decision of Heath J:
12.	In general terms, the task now is to determine damages on the basis:
(a)	What would have happened if Mangatu had not repudiated; and
(b)	What would have happened as a consequence of any action which Mangatu or FHL may have then taken?
13.	Because of the second issue it is not possible as Mangatu submits to resolve damages on the basis of whether Mangatu would have given a notice to remedy and then terminated for non-compliance with such notice.
14.	Even if it were to be determined that notice would have been given and the licence lawfully terminated, it does not then follow that damages would be nominal.  FHL is entitled to have the right to discharge the onus of establishing on the balance of probabilities that it could have got value from the licence.
[10]	On 7 March 2018 the arbitrator delivered the Damages Award.  He held that FHL had not suffered loss caused by Mangatu’s repudiation.  He found Mangatu was very dissatisfied with FHL’s performance and would have terminated on notice in any event.  Among other things, FHL had illegally logged some trees, a source of tension between it and Mangatu.  
[11]	The arbitrator found that if FHL had been given 120 days’ notice that Mangatu intended to terminate the Agreement, it would have considered its options to seek to retain the forestry right or extract some commercial value from it during the 120-day notice period.  Those options included attempting to persuade Mangatu to withdraw the notice, and seeking to sell the forestry right or 50 per cent of the shares in FHL.  FHL submitted all of these were realistic options that had a value that was lost as a result of Mangatu’s repudiation.  Mangatu should be required to pay damages representing the value of FHL’s lost rights, having regard to the existence of these options.
[12]	The arbitrator discussed a number of authorities concerning damages for loss of a chance, and set out the parties’ competing arguments about how he should approach contingencies affecting the value of the rights that FHL had lost as a result of Mangatu’s breach.  In relation to the issues that bore on whether Mangatu would have withdrawn the notice, the arbitrator said:
29.	I will determine the above issues on the balance of probability test.  Because of the confusion in the authorities as referred to above, I will also consider what the position would have been on a degree of probabilities and possibilities basis.
[13]	The authorities referred to by the arbitrator included the decision of this Court in Benton v Miller & Poulgrain (a firm).  The arbitrator set out the following passage from that decision:
[50]	In making a “loss of chance” assessment, broad judgments are called for.  At one end of the spectrum, very low probabilities are unlikely to be reflected in an award of damages.  So if the chance of avoiding an adverse event is as low as say one in ten, a Court will probably reject the claim rather than fix damages at ten per cent of the cost to the plaintiff associated with those adverse events.  At the other end of the spectrum that approach is sometimes, but not always, adopted.  So a 90 per cent chance of avoiding an adverse event may result either in complete recovery of all losses associated with that adverse event (on the theory that the chance of not avoiding those losses was sufficiently speculative to be able to be ignored) or alternatively a discount of ten per cent for contingencies.
[14]	The arbitrator held that FHL had not established on the balance of probabilities that a notice given by Mangatu would have been withdrawn.  He went on to say: 
If I was required to assess this matter on the degree of probabilities and possibilities, my assessment would be that FHL’s chances on this particular point were less than 10%.  
[15]	And very importantly, the arbitrator went on to find:
If Mangatu had given the 120 days’ notice and specified the various defaults, it would have been entitled to terminate if FHL had failed to remedy the defaults.  In the circumstances, FHL has not shown that it had more than a speculative chance of having Mangatu withdraw any notice to remedy which it may have issued.
[16]	The arbitrator also found there was little possibility third parties would have acted in a manner that created an opportunity of value to FHL.  FHL’s chances of success in an arbitration were speculative, not substantial.  There was no substantial chance that the Gisborne District Council would have withdrawn its abatement notices against FHL in relation to its illegal logging (one of the breaches of the Agreement relied on by Mangatu).  And even if it had, there were other defaults under the Agreement which could not have been rectified within the 120‑day period.  Mangatu would in any event have been entitled to terminate the Agreement at the end of the 120-day period, and would have done so.  The prospect of FHL obtaining relief in the Environment Court that enabled it to realise some value from the sale of its forestry rights was speculative.  The prospects of a sale of FHL’s forestry right, or of 50 per cent of the shares in FHL to fund its future operations, would also “at the most be speculative” in circumstances where a notice of default had been given, and Mangatu’s consent was required for such a transaction.
[17]	The arbitrator set out his conclusions on FHL’s claim for damages assessed on the basis of loss of a chance as follows:
85.	It follows from the above that in my view FHL has not established on the balance of probabilities that it had other than a speculative right to obtaining a commercial opportunity of value if Mangatu had proceeded and given its notice to remedy.  Any damages award based on loss of chance can therefore only be nominal.
86.	In several instances I have determined causation on the basis that FHL has not satisfied the onus on the balance of probabilities.  If in any of these instances I am incorrect and should have determined the matter on the balance of probabilities and possibilities, I would have assessed such degree as being no more than 10% and therefore in the negligible category.  As such, any award of damages could not be more than nominal.  
[18]	The arbitrator also dismissed FHL’s claim for reliance damages.  
Appeal to High Court from the Damages Award
[19]	FHL sought permission to appeal to the High Court from the Damages Award.  Courtney J granted permission to appeal on two questions of law.  The Judge said:
[71]	FHL has satisfied me that the Arbitrator made an error in identifying the correct standard of proof required for determining causation in cases based on loss of a chance where the loss turns, in part, on the hypothetical actions of third parties.  It may also be that there was an error in failing to consider the application of s 9 of the [Contractual Remedies Act 1979] in relation to the retained portion of the royalty payment, though I cannot resolve that question on the material before me.
[72]	Not only is the issue important to the parties to this case, but the identified error of law is likely to be relevant to others involved in arbitration proceedings.  I consider that this is an appropriate case for leave to appeal to be granted.
[20]	In granting leave, the Judge expressed the view that the arbitrator had made an error of law in relation to the standard of proof required for determining causation with respect to contingencies relating to hypothetical actions of third parties.  In her view, that “third parties” category included the defendant Mangatu.  
The High Court judgment
[21]	FHL’s appeal was heard by Downs J.
[22]	FHL succeeded on the second ground of appeal in respect of which Courtney J granted leave: the determination of FHL’s claim for damages under s 9 of the Contractual Remedies Act 1979.  The award was remitted for consideration of the availability of s 9 damages.
[23]	The Judge dismissed FHL’s appeal in relation to the causation issue.  The Judge framed the issue in this way:
[1]	In a loss of chance claim, the plaintiff must prove the defendant wrongly deprived the plaintiff of a chance of some value.  This may require the plaintiff to prove she or he would have done certain things.  If so, the plaintiff must prove these to the usual, civil standard.  In other words, the plaintiff must prove it is more likely than not she or he would have done these things.  
[2]	In some loss of chance claims, a plaintiff’s loss turns on how a third party might have acted: X.  If so, the plaintiff does not need to prove it is more likely than not the third party would have done X; it is sufficient if the plaintiff proves there is a real prospect the third party would have done X.  If this relatively low threshold is crossed, the Court then turns to quantum.  
[3]	In other loss of chance claims, a plaintiff’s loss turns on whether the defendant would have done something: Y.  Must the plaintiff prove it is more likely than not the defendant would have done Y?  Or, need the plaintiff only prove there is a real prospect the defendant would have done Y?  These are the questions in this appeal.  
[24]	The Judge concluded that in the third of these scenarios, the plaintiff should be “required to prove what the defendant would have done — to demonstrate the plaintiff has lost a chance of genuine value — according to the usual, civil standard”.  So FHL could succeed in its claim only if it could show on the balance of probabilities that Mangatu would have withdrawn a default notice, or taken other steps that would have enabled FHL to extract some value from the agreement.  
[25]	That was sufficient to dispose of the first ground of appeal concerning the test for causation of loss.  FHL had not shown on the balance of probabilities that Mangatu would have withdrawn its notice, or taken other steps that would have enabled it to realise some commercial value from the agreement.  So FHL had not established that it suffered any loss as a result of the repudiation by Mangatu.
[26]	The Judge went on to find that even if the arbitrator had erred in his approach to the test for causation, that error would not have led to a different result.  The arbitrator had considered the alternative approach for which FHL contended: whether there was a real prospect FHL might have been able to persuade Mangatu to withdraw the termination notice.  The arbitrator had concluded this possibility was speculative, and dismissed it.  The Judge considered a number of other options contended for by FHL which might have produced some commercial value, and concluded that in relation to each of those possible avenues of recovery the arbitrator had assessed the prospect of FHL succeeding as speculative.  So, the Judge held, even if the arbitrator had erred in law, FHL’s claim based on loss of a chance to realise some commercial value following a valid 120-day termination notice would have failed.  
Application to High Court for leave to appeal to this Court
[27]	FHL applied to the High Court for leave to appeal to this Court from the High Court judgment.  FHL submitted that the case raises a question of law about the standard of proof to be applied to a defendant in a loss of chance case, and this in turn raises two issues:
What is the plaintiff required to prove to establish causation in a contract based loss of chance case; and
If causation is established, then are the defendant’s actions in valuing the value of the loss to be assessed on a balance of probabilities basis or a possibilities basis?
[28]	Downs J accepted it was possible to identify a question or questions of law in relation to the arbitrator’s assessment of loss.  He also accepted this is a difficult area.  However, he was satisfied leave should not be granted for two reasons:
[11]	First, the Arbitrator’s factual conclusions leave no realistic prospect of reversal.  The Arbitrator found Mangatu was determined to terminate the forestry right, and entitled to do so because of Forest Holdings’ deficient performance as a forester.  I repeat what I said when I dismissed the appeal: “These bedrock conclusions leave little room for the existence of a valuable chance in a four-month notice period irrespective of who had to prove what, and to which standard, if any”.   
[12]	Second, this case is now old.  Mangatu terminated the right in 2013.  The Arbitrator’s original awards were in 2016, so, more than three years ago.  The High Court has been involved repeatedly.  Yet another appeal (to the Court of Appeal)—in 2020 or perhaps even 2021—would involve more delay and cost.  In all probability, the outcome would not change.
[29]	The application for leave to appeal was therefore declined.
Application for special leave to appeal to this Court
[30]	FHL now seeks special leave to appeal to this Court under cl 5(6) of sch 2 to the Arbitration Act.  This Court set out the criteria for grant of special leave under cl 5(6) in Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd:
[33] 	It does not matter particularly whether the cl 5(5) test is equated to the s 67 test or the s 144 test. Under either test the primary focus is on whether the question of law is worthy of consideration. We cannot do better than Randerson J’s summary of the position in Cooper at para [12]:
“(a) 	The appeal must raise some question of law… capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.
(b) 	Upon a second appeal, the Court of Appeal is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below.
(c) 	Not every alleged error of law is of such importance either generally or to the parties as to justify further pursuit of litigation that has been twice considered and ruled upon by a Court.”
…
[35] 	Where the High Court has refused leave, this Court has power under cl 5(6) to grant special leave to appeal. Obviously that should not be a second bite at the same cherry. This Court will be very mindful of why the High Court declined leave, and will grant special leave only if the High Court Judge’s decision was plainly wrong or if the test set out above was not applied or was misapplied. We would hesitate to say that the test under subcl (6) is different from the test under subcl (5). It is simpler to say the test is the same, but this Court will exercise its powers sparingly and mindful of why the High Court declined leave. On this aspect, Mr Williams and Mr Weston QC, for Silverfield, were agreed.
[31]	FHL says that its proposed appeal from the High Court judgment would raise the following questions of law:
(a) 	Was the breach of the requirement to give notice of termination sufficient to establish causation?
(b) 	Are the hypothetical actions of both the plaintiff and the defendant (at all times) to be established on the balance of probabilities?
(c) 	Is the finding of multiple 10% chances of realising a $10 million asset relevant to causation and/or sufficient to determine that the chance was speculative and, therefore, to conclude that the claim fails at the causation stage?
The appeal has no realistic prospect of success
[32]	We consider that the Judge was right to decline leave to appeal in light of the arbitrator’s factual findings.  Those findings, which cannot be challenged on appeal, were to the effect that FHL’s chance of success on each of the value-creating contingencies that it identified was speculative and not substantial.  
[33]	The arbitrator described FHL’s chances of success in relation to some of these contingent avenues of recovery as “no more than 10%”.  FHL says that is a meaningful chance of success, and is in itself sufficient to justify an award on a “loss of chance” basis.  However it is clear from the context in which the arbitrator used that description that he saw it as shorthand for a chance that was speculative and not substantial.  That reflected the language used by this Court in Benton v Miller & Poulgrain.  The arbitrator expressly described his “no more than 10%” degree of success assessment as “in the negligible category”.  
[34]	It follows that FHL would have no realistic prospect of obtaining more than nominal damages on an appeal to this Court, even if this Court was persuaded to adopt the approach contended for by FHL.  
No question of law capable of bona fide and serious argument
[35]	Nor do we consider that there is any realistic prospect that this Court would adopt the approach contended for by FHL.  The proposition that damages should be assessed on a “loss of a chance” basis in a contract claim in circumstances where the contingency in issue is how the defendant would have acted is not in our view seriously arguable.  It seems to us that the litigation in the High Court before Courtney and Downs JJ miscued.  The Judges were invited to choose between two incorrect approaches.  Unsurprisingly, the answers they gave were as a result incorrect.  
[36]	In the judgment of Downs J from which FHL seeks to appeal, in the passage set out at [23] above, it was suggested that the question in the appeal was whether FHL was required to prove it was more likely than not that the defendant would have done Y, or whether FHL need only prove that there was a real prospect that the defendant would have done Y.  However, we consider that the better view is that neither of these options represents the correct approach in this scenario.  A plaintiff who brings a claim against a defendant for breach of contract is entitled to recover damages reflecting the position the plaintiff would have been in if the contract had been performed by the defendant.  But, importantly, the defendant is only required to compensate the plaintiff for loss of the minimum performance that the defendant was obliged to provide.  As the learned author of McGregor on Damages explains in the chapter of that text concerned with certainty of damage and loss of chance, this requires a different approach to contingencies that depend on the acts of the defendant:
(a)	Damages to be based upon defendant’s least onerous obligation
Where the person upon whose will a contingency depends is not a third party, bringing in the loss of a chance principle already fully discussed, but is the defendant himself in breach of contract, then a very different principle comes into play.  That principle is that where the defendant has the option of performing a contract in a variety of ways, damages for breach by him must be assessed on the assumption that he will perform it in the way most beneficial to himself and not in that most beneficial to the claimant.  This was well settled in the 19th century, but finds its main applications later.  The simplest illustration is that of the defendant who has promised to do one of two things and fails to do either.  Here the damages will be assessed on the basis of the alternative less burdensome to the defendant. …
[37]	In Paper Reclaim Ltd v Aotearoa International Ltd the Supreme Court, after setting out an extract to similar effect from an earlier edition of McGregor on Damages, said:
[24]	Mustill J said in Paula Lee Ltd v Robert Zehil & Co Ltd that the inquiry always involves a comparison between the claimant’s actual position in face of the breach, and the position the claimant would have occupied if the contract had been performed. He said it must involve an identification of the promise (which here is an implied promise not to terminate on less than reasonable notice), followed by a valuation of its promised worth to the promisee. Each part of the inquiry may involve considering a choice which would have been open to the promisor. That means a choice which was reasonably open to it. The choice reasonably open to Paper Reclaim was to terminate the contract upon expiry of a reasonable period of notice, in the meantime not revoking Aotearoa’s authority to act as agent for export sales.
[25]	So Paper Reclaim could have met its contractual obligations, and thereby fully performed the contract, by giving Aotearoa 12 months’ notice of termination and continuing to abide by its contract with Aotearoa during that time. In accordance with principle, therefore, damages for Paper Reclaim’s repudiatory breach of contract should be assessed on the assumption that, if it had adhered to the contract, it would have chosen to give 12 months’ notice on 2 February 2001, and that the contract would have terminated upon expiry of that period.
[38]	In the present case, there was no need for an inquiry into whether Mangatu was likely to give notice of its intention to terminate the Agreement on 120 days’ notice.  Rather, in circumstances where Mangatu was entitled to take that step because FHL was in breach, it should have been assumed for the purpose of calculating damages that Mangatu would have done so on 10 July 2003.  If, as the arbitrator found, FHL was incapable of remedying the defaults that justified giving such a notice within 120 days, and Mangatu would have had the right to terminate at the expiry of that notice period, damages should have been assessed on the basis that it would have done so.  No inquiry into the likelihood of Mangatu taking that step was required, provided that was a choice that was reasonably open to it.  As plainly it was.  If those assumptions are made, none of the avenues identified by FHL for obtaining some value out of the forestry rights had any meaningful prospect of success.  It was not suggested that FHL could realise any value by itself seeking to continue to perform for that 120‑day period.  It is inconceivable that a purchaser would have been willing to pay for assignment of an Agreement that was liable to be terminated in the very near future, even putting to one side the prospect of Mangatu withholding its consent to an assignment in circumstances where there were multiple unremedied breaches.  
[39]	Heath J was right to identify the need for an inquiry into the value (if any) that FHL could have extracted from the forestry right during the 120-day notice period.  But the Judge went too far in requiring the arbitrator to conduct an inquiry into the likelihood of Mangatu giving a valid notice, or agreeing to withdraw such a notice once given.  The result appears to have been that the subsequent steps in the litigation proceeded on an incorrect premise.  
[40]	We note that in his award on preliminary damages issues dated 29 July 2016 the arbitrator recorded that Mangatu relied upon Paper Reclaim.  The arbitrator went on to say that this case was “not directly on point but does lend support to the suggestion that damages should be assessed on the assumption that Mangatu would have given the 120 days’ notice and that it would have terminated at the end of that period”.  No explanation is given for why the decision was seen as not being directly on point, but the reason may be the nature of the factual inquiry directed by Heath J.  That may also explain why this Supreme Court decision was not identified as the starting point for analysis of FHL’s claim in the subsequent High Court hearings.  
[41]	FHL put considerable emphasis in its submissions on the decision of the High Court of Australia in Commonwealth of Australia v Amann Aviation Pty Ltd.  FHL says that this was a case in which damages for breach of contract were assessed on a loss of a chance basis, even though the relevant contingency was termination of the contract by the defendant, the Commonwealth of Australia.  However that submission misunderstands the High Court decision.  The Court did not depart from the approach described in McGregor on Damages in the passage set out at [36] above.  Rather, the Judges in the majority emphasised that the power of cancellation conferred by the agreement was conferred on the Secretary of the Department of Transport personally.  The Secretary was not a party to the contract, and could not simply exercise that power in the interests of the Commonwealth.  It was therefore a “third party” contingency case, as Deane J explained:
In so far as the possibility of cancellation is concerned, the answer to the submission is that the effect of the conclusion that the power of cancellation conferred by cl. 2.24 was vested in the Secretary personally and could not be exercised capriciously or unfairly is that the power of cancellation was not a power which was exercisable by the Commonwealth itself.  It was exercisable by a third party…
[42]	That decision of the High Court of Australia, properly understood, provides no support for FHL’s argument.
[43]	If the arbitrator had applied the correct test, FHL’s claim to damages would have been assessed on the basis that Mangatu would have given notice on 10 July 2003 and terminated the Agreement 120 days later.  FHL’s preferred approach is not seriously arguable, having regard to the well-established principle set out in McGregor on Damages and confirmed by relatively recent Supreme Court authority.  There is no need for this Court to hear the proposed appeal in order to clarify the law: it is in our view quite clear, despite the wrong turning that this particular case took.  
Result
[44]	We therefore decline to grant special leave to appeal to this Court.
[45]	Costs should follow the event in the ordinary way.  Mangatu is entitled to costs on a band A basis, with usual disbursements.

Solicitors: 
Harkness Henry, Hamilton for Applicant
MinterEllisonRuddWatts, Auckland for Respondent