IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2014-412-000014 [2014] NZHC 2496

BETWEEN	DENNIS PAUL IRELAND AND
ANGELA CATHERINE IRELAND Appellants	

AND	
STEPHEN JOHN GRANT AND DAVID JAMES SMELLIE
First Respondents

ROLIEN GEERTRUIA BUSCH Second Respondent	

Hearing:	2 October 2014	

Appearances:	
(By way of telephone conference) L A Andersen for Appellants
J Hambleton for First Respondents
T J Shiels QC for Second Respondents	

Judgment:	
10 October 2014	

JUDGMENT OF GENDALL J

The application

[1]       This is an application for leave to appeal to the Court of Appeal, a judgment I gave in this proceeding on 2 July 2014.1     That judgment essentially allowed an appeal against an earlier decision of the Family Court.2   This case concerned a claim by the appellants (the Irelands), pursuant to the Testamentary Promises Act 1949 against the estate of Mrs Betty Osmand.  In her last will Mrs Osmand had left all of
her estate to the second respondent (Ms Busch). After hearing the case, I allowed the appeal against the Family Court decision and divided the estate between the Irelands
and Ms Busch in equal shares.

1	Ireland v Grant [2014] NZHC 1523.
2	Ireland v Grant [2013] NZFC 8802.

IRELAND v GRANT [2014] NZHC 2496 [10 October 2014]

[2]	Ms Busch, now seeks leave to appeal that decision to the Court of Appeal.  In support of the application, the following grounds are advanced:

1.         The learned High Court Judge erred in directing himself that Rae v International Brokers Limited [1998] 3 NZLR 190 (CA) is no longer authoritative and that the approach to appeals set out in that case has been “softened” by Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.

2.         The learned High Court Judge approached the appeal without regard to the findings of the learned Family Court Judge, except with regard to findings of credibility.

3.         While the learned High Court Judge purported to accommodate the findings of credibility made by the learned Family Court Judge, the learned High Court Judge’s decision is inconsistent with those findings.

4.         The learned High Court Judge erred in law in holding “that the affidavits in support of the defence was tasked with the near impossible – proving a negative” (para [68]), thereby reversing the onus of proof as to the making of a promise.

5.         Whether the learned High Court Judge was correct in his approach to the appellate function raises a question of law capable of bona fide and serious argument.

6.         The correct approach to the appellate function and the authority of the decision of the Court in Rae following the decision of the Supreme Court in Austin, Nichols is a matter of general public importance.

7.         Whether the learned High Court Judge was correct in his approach is a matter of private importance to the Second Respondent in that it determined:

–	whether she is entitled to full ownership of my mother’s
farm on which I grew up; or

–          whether  she  had  no  more  than  an  interest  as  tenant  in common as to one half (with a difference in value of approximately $337,000)

8.         Whether the learned High Court Judge’s statement of the onus on these parties not accepting an applicant’s evidence of the making of a claim, i.e. that they are tasked with proving a negative is a question of law capable of bona fide and serious argument.

9.         The  onus  of  proof  in  respect  of  the  making  of  a  promise  in  a testamentary   promises   claim   is   a   matter   of   general   public importance.

10.       Whether the learned High Court Judge was correct in his approach is a matter of private importance to the Second Respondent in that it determines:

–	whether she is entitled to full ownership of my mother’s
farm on which I grew up; or

–          whether  she  had  no  more  than  an  interest  as  tenant  in common as to one half (with a difference in value of approximately $337,000)

[3]	This application for leave is opposed by the Irelands.   The basis for their opposition is that:

(a)       There was no error of law or error of approach in the High Court decision;

(b)       Ms Busch has shown no good cause why leave for the appeal should be given.

(c)       There is no question of law or fact capable of bona fide [or] serious argument involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal (as the Supreme Court have determined is the approach to be taken in determining appeals);

(d)       It was incorrect to state that the High Court decision reversed the onus of proof as to the making of a promise as the statement relied upon was simply identifying the difficulty faced by the Respondents when the Appellants had provided evidence of the promise having been made.

[4]	I now turn to consider the approach to be taken to appeals.

Second appeals to the Court of Appeal

[5]	No right of appeal against High Court decisions is conferred upon a party by the provisions of the Law Reform Testamentary Promises Act 1949.  Section 67 of

the Judicature Act  1908  therefore applies  to  this  appeal,  which  in  turn  invokes r 20.22 High Court Rules.  Rule 20.22 provides:

20.22   Applications for leave

(1)        This rule applies when an enactment provides that a decision of the court may be appealed to the Court of Appeal with leave of the court.

(2)        If this rule applies, an application for leave to appeal must be made to the court within 20 working days after the decision is given.

(3)        A respondent who wishes to cross-appeal must apply for leave to cross-appeal within 10 working days after the date on which a copy of the application under subclause (2) is served on the respondent.

(4)        An application for leave to appeal under subclause (2) or to cross- appeal   under   subclause   (3)   must   be   made   by   interlocutory application.

[6]       As an aside, I note this application for leave was filed out of time.  Judgment was delivered on 2 July 2014, with the 20th working day following delivery being 30
July 2014.  Mr Shiels QC’s application was dated 11 August 2014, and was not filed until 13 August 2014, some 30 working days after judgment was delivered.   No explanation has been offered for the late filing, and no extension has been sought.

[7]       It is possible as I see it that this application could have been dismissed on the basis of late filing.   I have decided however that, in the circumstances prevailing here, testing the merits of the application is the most appropriate course.  But, for the reasons that shortly follow, I am satisfied that in any event the merits warrant the same conclusion, namely, that the application must fail.

The test for second appeals to Court of Appeal

[8]       The threshold to be passed before a second appeal to the Court of Appeal will be justified is well rehearsed.   It is expressed in McGechan on Procedure in the following terms:3

The appeal must raise some question of law or fact 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.

3	McGechan on Procedure (online looseleaf ed, Brookers) at J67.02.   See too Waller v Hider
[1998] 1 NZLR 412 (CA); Cuff v Broadlands Finance Ltd [1987] 2 NZLR 343 (CA).

Not every alleged error of law is of such importance, either generally or to the parties, as to justify further pursuit of litigation already twice considered and ruled upon by a Court, so the test is a restricted one.

[9]       The test is plainly a high one.   This is in part to ensure that the valuable resources  of  the  Court  of Appeal  are  not  unnecessarily  wasted,  nor  additional expense incurred by the parties unless there is some “realistic hope of benefit”.4

My approach to the appeal from the Family Court

[10]     I do not consider the approach I took to the appeal from the Family Court decision gives rise to an appealable error of law.   In its authoritative decision in Austin, Nichols & Co Inc v Stichting Lodestar,5 the Supreme Court first stated:6

The short point raised by the appeal is whether the High Court on an appeal under s 27(6) of the Trade Marks Act 1953 must defer to the assessment of the Commissioner if the conclusion he or she has reached is one on which reasonable minds may differ. The short answer is that the general appeal under s 27(6) requires the High Court to come to its own view on the merits. The  weight it  gives to the  decision of the  Commissioner is a  matter of judgment. If the High Court is of a different view from the Commissioner and is, therefore, of opinion that the Commissioner's decision is wrong, it must act on its own view

(emphasis added)

The Supreme Court continued:7

Perhaps the most familiar general appeals are those between courts…The appeal is usually conducted on the basis of the record of the court or tribunal appealed from unless, exceptionally, the terms in which the statute providing the  right  of  appeal  is  expressed  indicate  that  a  de  novo  hearing  of  the evidence is envisaged… In either case, the appellant bears an onus of satisfying the appeal court that it should differ from the decision under appeal.  It is only if the appellate court considers that the appealed decision is wrong that it is justified in interfering with it.

The  appeal  court  may  or  may  not  find  the  reasoning  of  the  tribunal persuasive in its own terms.   The tribunal may have had a particular advantage… In such a case the appeal court may rightly hesitate to conclude that findings of fact or fact and degree are wrong… But the extent of the consideration an appeal court exercising a general power of appeal gives to the decision appealed from is a matter for its judgment… On general appeal,

4	Snee v Snee [2000] NZFLR 120 (CA); Downer Construction (New Zealand) Ltd v Silverfirld
Developments Ltd [2007] NZCA 355, [2008] 2 NZLR 591.
5	Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
6	At [3].
7	At [4]–[5].

the appeal court has the responsibility of arriving at its own assessment of the merits of the case.

(citations omitted and emphasis added)

[11]	I now come to the most oft-cited passages of Austin, Nichols, which read:

[13]      …The appeal court must be persuaded that the decision is wrong, but in reaching that view no “deference” is required beyond the “customary” caution  appropriate  when  seeing  the  witnesses  provides  an  advantage because credibility is important….

[14]      In  Federated  Farmers  the  Court  expressed  the  view…  that  on general appeal… weight “must” be accorded to the decision of the tribunal appealed from.  Vicom New Zealand does not however support as emphatic a proposition.   Cooke P, for the Court of Appeal, there expressed rather the view that “weight can still properly be given to the Registrar’s opinion” when an appeal court is required to come to its own determination.

…

[16]      Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment.   If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ.  In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of acceptability an weight to be accorded to the evidence, rather than forming its own opinion.

(citations omitted and emphasis added)

[12]	And, in the later and important Supreme Court decision Kacem v Bashir8 that

Court confirmed and explained the Austin Nichols principles in paragraphs 31 and

32.  And, in doing so, the Court specifically stated the effect of additional evidence requires a de novo assessment.

[31]      The Court of Appeal discussed the application of the decision of this Court in Austin, Nichols & Co Inc v Stichting Lodestar to the present kind of appeal.  The Court correctly observed that on a general appeal of the present kind the appellate court has the responsibility of considering the merits of the case afresh.  The weight it gives to the reasoning of the court or courts below is a matter for the appellate court’s assessment.  We should add here that if the appellate court admits further evidence, that evidence will necessarily require de novo assessment and consideration of how it affects the correctness of the decision under appeal.  The Court of Appeal was right to say that Courtney J had rather overstated the effect of Austin, Nichols when  she  indicated  she  should  approach  the  appeal  to  the  High  Court

8	Kacem v Bashir [2010] NZSC 112; [2011] 2 NZLR 1.

“uninfluenced” by the reasoning of the Family Court.  The High Court was required to reach its own conclusion, but this did not imply that it should disregard the Family Court’s decision.   What, if any influence the Family Court’s reasoning should have was for the High Court’s assessment.

[32]      But, for present purposes, the important point arising from Austin, Nichols is that those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion involves an assessment of fact and degree and entails a value judgment.

[13]     I struggle to see, how, on the authority of Austin, Nichols, it can be incorrect to make a judgement call as to the degree of deference required in a particular case, when the Supreme Court has expressly stated that the extent of deference requires such an exercise of judgement.  It was my judgment in the substantive appeal that I would defer to the extent explicitly stated.   I did so.   The decision of the Family Court was therefore given weight, that is, the weight I considered fit to ascribe it.

[14]     However, because I disagreed with the Family Court Judge, accommodation of such findings was often irreconcilable with the differing view I had reached on the merits of the appeal.  Some of the conclusions I reached which made this impossible were:

(a)       Many of the grandchild Lydia Ireland’s interactions with Mrs Osmand occurred when she was a mature young woman, not as a child.   In these interactions Lydia discussed many matters with Mrs Osmand, including the farm.  The Family Court decision was focused on her interactions as a child.  No weight seemed to be placed on those more mature interactions.

(b)       Insufficient weight was placed on the evidence of Mr Malcolm Scott, the accountant.  In many ways Mr Scott was the least partisan witness in the proceeding, he had a longstanding professional relationship with Mrs Osmand and he was experienced with financial matters.  He had no reason to misrepresent his dealings with Mrs Osmand to the Court.

(c)      There must have been some compelling impetus for the Irelands uprooting their lives in England, and all the support that entailed, and moving to the other side of the world.  Related to this is the fact that I disagreed  with  Judge  Flatley  that  the  genesis  of  this  move  was financial strife.

(d)       The letter Mrs Osmand wrote to Mr Ireland in 1989, in my view, was a compelling facet of the evidence in support of the appeal.

(e)	The new evidence of Ms Katherine Forsdyke, Mrs Ireland’s mother,

which Judge Flatley had not had the advantage of hearing.

(f)       Once I had found the burden discharged by the Irelands, as a matter of logic the equivocal evidence for the respondents could not then disprove that claim.   The better explanation for the inconsistent evidence was that Mrs Osmand simply represented herself differently to different groups of people.

(g)       And as an aside, before me, counsel for Ms Busch even acknowledged that Judge Flatley was wrong when he concluded the Irelands themselves did not give evidence of a promise because in fact they had done so in their evidence.

[15]     I  now  address  the  objection  by  Mr  Shiels  QC  to  my  comments  on  the decision of the Court of Appeal in Rae v International Insurance Brokers.9   There is in my view a short retort to this objection.   This is simply that the mandatory prescription in Rae as to the nature and extent of deference required to be exhibited by appellate courts fulfilling their appellate role seems anathema to the judgment- based, permissive regime constituted by the higher authority decision of the Supreme Court in Austin, Nichols.  This is perhaps best illustrated by a comparison.  In Rae, the Court of Appeal stated:10

Exceptional caution in departing from the trial Judge’s findings of fact are
therefore regarded as imperative.

In Austin, Nichols the Supreme Court stated:11

…the extent of the consideration an appeal court exercising a general power of appeal gives to the decision appealed from is a matter for its judgment

[16]     At least to my mind, imperatives do not mesh well with a regime largely predicated on broad judgment.  While deference will usually be required, there is no mandated ‘quantity’ of such.  I also record that I did not go so far as to state that Rae had been abrogated.  I recorded that:12

In my view…since the decision in Austin, Nichols & Co Inc v Stichting
Lodestar the position with respect to deference has somewhat softened.

(citations omitted)

[17]     However, irrespective of whether this is the correct legal position, the way in which I approached the appeal from the Family Court to my mind was entirely acceptable on ordinary Austin, Nichols principles.

[18]     An appeal is not justified on this ground.

The claimed reversal of onus

[19]     This ground of appeal also in my view lacks merit.  There can be no doubt that a person not privy to private discussions will be unable to disprove their content, or even that they took place.   That is, they cannot prove a negative.   By way of overly simplistic analogy, if a person has never seen an elephant, it would be absurd for them to seek to utilise that absence of evidence as proof that elephants do not exist.  Once proof of elephant existence is positively made out, it is then impossible to rely on ignorance of elephant existence to prove that elephants do not exist.

[20]     Once I had found the Ireland’s claim made out, there was little Ms Busch could do to dissuade me from that finding.  That is because, again as a matter of fact, she  was  quite  unable  to  proffer  any propositions  that  would  derogate  from  the

veracity and weight of that which I had found positively proved on balance.  This did not shift the onus.   It simply meant that if the Ireland’s could discharge the onus incumbent upon them, which I found they did, there was little Ms Busch could then do.

[21]     Finally, issues of logic aside, it is clear on the face of the judgment that a wholly standard burden of proof was applied:13

Standing back and considering the totality of the evidence, I have reached a different conclusion from that reached by Judge Flatley. In my view this conclusion is not in any way impacted by the evidence of the witnesses in support of the defence. The defence was tasked with proving a negative. No evidence was put forward to suggest that Mrs Osmand had, in front of the Irelands or their daughters, intimated in any way that the Irelands would not be receiving the farm. My interpretation of the conflict between the evidence which Judge Flatley identifies is that Mrs Osmand simply said different things to different people. This does not in any way detract from the fact that a promise was made. I conclude that the Irelands have established on the balance of probabilities that Mrs Osmand made the testamentary promise to them which they allege.

(emphasis added)

[22]     An appeal is not justified on this ground.

Failure to observe my own direction as to deference

[23]     As I have recorded in respect of the first ground of challenge, the view I had reached on the merits of the case, which was the diametric opposite of that reached by the Family Court, often meant that accounting for credibility findings was simply irreconcilable.  To the greatest extent possible in such circumstances, I took account of the Family Court decision.

[24]     I find too that an appeal is not justified on this ground.

Conclusion

[25]     And lastly, I conclude that this appeal does not raise a question of law or fact capable of bona fide and serious argument in this case such that it involves any

13	At [87].

public interest or indeed some private interest of the parties sufficient to outweigh the cost and delay of a further appeal.

Result

[26]	The threshold for an appeal to the Court of Appeal has not been met by

Ms Busch. The present application for leave to appeal is accordingly dismissed.

[27]	Costs on the present leave application are to follow the event in the usual way and are awarded here to the Irelands on a 2B basis, to be fixed by the Registrar.

...................................................
Gendall J

Solicitors:
L A Andersen, Dunedin
Solomons, Dunedin
Gallaway Cook Allan, Dunedin
T J Shiels QC, Dunedin