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Link Technology 2000 Ltd v Attorney-General CA191/03 [2005] NZCA 27; [2006] 1 NZLR 1; (2005) 7 HRNZ 779; (2005) 17 PRNZ 465 (3 March 2005)

Last Updated: 15 January 2018

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA191/03

BETWEEN LINK TECHNOLOGY 2000 LIMITED
First Appellant

AND HARRY MEMELINK
Second Appellant

AND THE ATTORNEY-GENERAL (NEW ZEALAND CUSTOMS SERVICE)
Respondent

Hearing: 5 July 2004

Court: Anderson P, McGrath and O’Regan JJ

Counsel: T Ellis and A Shaw for First and Second Appellants
I C Carter and A S Butler for Respondent

Judgment: 3 March 2005

A The appeal is dismissed.

B The respondent is awarded costs of $3,000 together with reasonable disbursements to be agreed by counsel or, if not agreed, to be fixed by the Registrar.

REASONS

(Given by O’Regan J)

Table of Contents

Para No

Introduction [1]
Background [2]
The summary judgment application [11]
Relevant rules [13]
The High Court decision [18]
Issues [25]
Compensation under the Bill of Rights [27]
Submissions [28]
Discussion [34]
Issue estoppel/res judicata
Submissions [40]
Discussion [47]
Judgment in rem
Submissions [56]
Discussion [60]
Abuse of process [61]
Walker v Wilson [63]
Attorney-General v Beggs [68]
Discussion [83]
Other matters [87]
Costs in the High Court [91]
Submissions [92]
Discussion [95]
Costs in this Court [97]

Introduction

[1] This is an appeal against a decision of Hammond J in the High Court (reported as Link Technology 2000 Limited v Attorney General (2003) 7 HRNZ 166). In that decision, Hammond J declined an application made by the appellants that the Court should enter summary judgment for the appellants on the issue of liability, and direct a trial on the issue of the amount of damages. Hammond J awarded costs against the appellants. The appellants now appeal against the refusal to order the entry of summary judgment on the issue of liability and also appeal against the award of costs made against them.

Background

[2] The history of this case stretches back to 1994. At that time the first appellant (“Link”) was carrying on business as an importer in Petone. The second appellant, Mr Memelink, was the principal shareholder and managing director of Link (he is now the only shareholder). Mr Memelink owned the business premises occupied by Link.
[3] In 1994 the Customs Department (now New Zealand Customs Service) began an investigation of Link. This investigation focused on the importation of router bits by Link. The issue was whether these bits were made of tungsten carbide (in which case they would be dutiable) or of carbide only (in which case they would be duty free).
[4] It was decided to seek permission to search Link’s premises. A Customs officer who held a warrant under s 216 of the Customs Act 1966 (the legislation in force at the relevant time) sought the permission of the Collector of Customs to apply to the District Court to sanction the use of the warrant to search Link’s premises. Permission was granted and a Deputy Registrar of the District Court sanctioned the use of the warrant. Four Customs officers conducted a daylight search of Link’s business premises in reliance on the warrant. In the course of this search, the Customs officers located and seized a number of documents relating to Link’s business. There is a dispute about the number of documents and the significance of them, which does not need to be resolved for present purposes.
[5] In early 1996, the appellants were charged with various offences under the Customs Act.
[6] The appellants maintain that none of the documents seized by the Customs officers related to router bits, and that the charges also did not relate to router bits. Rather, they related to other matters which were alleged to have been revealed by the documents seized during the search of Link’s premises.
[7] The charges against Link were discontinued because Link had been struck off the Register of Companies. The prosecution of Mr Memelink continued, however.
[8] Mr Memelink challenged the legality and reasonableness of the search and sought the exclusion of the evidence obtained by Customs as a result of the search. A two day hearing took place in the District Court in December 1997 before Judge Willy. In an oral judgment, the Judge ruled that neither the Collector (in giving the officer permission to seek the Registrar’s sanction) nor the Deputy Registrar (in sanctioning the use of the warrant) could have been satisfied that a warrant in the terms issued could, on the material before them, be lawfully issued. Thus he ruled that the resulting search was unlawful. He also determined that the Customs officer responsible for the search had executed the warrant in an unreasonable fashion, and that the evidence obtained as a result of the execution of the warrant should be excluded. In light of that decision, the charges laid against Mr Memelink were withdrawn, by leave, in early 1998.
[9] The appellants commenced two separate civil proceedings in April 2000. (Link had been restored to the Register of Companies by that time). These proceedings were:

(a) The present proceedings against the Attorney-General in respect of the New Zealand Customs Service alleging:

(i) unreasonable search and seizure in contravention of s 21 of the New Zealand Bills of Rights Act 1990 (Bill of Rights);

(ii) trespass to goods: detinue and conversion;

(iii) trespass to land;
(iv) misfeasance in public office.

The defence to all of these claims was denial, and in addition affirmative defences were raised under s 228A of the Customs Act, s 26 of the Crimes Act 1961 and s 6(5) of the Crown Proceedings Act 1950;

(b) An action against the Attorney-General in respect of acts and omissions of the Deputy Registrar of the District Court at Wellington alleging misfeasance in public office, unreasonable search and seizure and breach of statutory duty. Again, the defences are denials, and affirmative defences under s 228A of the Customs Act and s 6(5) of the Crown Proceedings Act are raised.
[10] At the time that these proceedings were commenced, the appellants also applied for summary judgment on the issue of liability and an order directing a trial to determine the amount of damages. No summary judgment application was made in relation to the proceeding against the Deputy Registrar. However, at the commencement of the High Court hearing, counsel for the appellants applied for the consolidation of the two sets of proceedings. Hammond J adjourned that application and his decision (and this appeal) relate only to the action against the Attorney-General in respect of the acts and omissions of the New Zealand Customs Service.

The summary judgment application

[11] The appellants sought summary judgment on the basis that Judge Willy’s decision had made findings of fact and law giving rise to res judicata and/or issue estoppels between the parties to the present proceedings (or their privies), and that the issues determined by Judge Willy were determinative of the issue of liability arising in the present proceedings. Alternatively, it was argued that it would be an abuse of process for the respondent to relitigate matters previously determined by Judge Willy. It was argued, therefore, that the only question to be determined at trial was the amount of compensation to be awarded to the appellants.
[12] The respondent opposed summary judgment. Counsel for the respondent, Mr Carter and Dr Butler, submitted that the District Court decision did not give rise to res judicata or issue estoppel, and it would not be an abuse of process to raise again the issues of the legality and reasonableness of the search. They noted that the District Court decision was made at the conclusion of a voir dire in the course of a criminal prosecution and should not bind a Court in a civil proceeding for Bill of Rights compensation. They said the District Court decision was, in any event, not determinative of liability to pay damages or compensation in respect of any breach of the Bill of Rights, trespass to goods, trespass to land or misfeasance in public office. They said that the search was in fact lawful and that there was no trespass to goods, trespass to land or misfeasance in public office. In any event, Mr Memelink could have no claim to trespass to goods or trespass to land as he was not the owner of any goods taken by Customs officers from Link’s premises and was not the lawful occupier of those premises. The respondent also denied that there was any misfeasance in a public office on the facts of the case.

Relevant rules

[13] The appellants’ application to the High Court was made under r 137 of the High Court Rules. That Rule empowers the High Court to give judgment on the issue of liability, and direct a trial on the issue of amount if the applicant satisfies the Court “that the only issue to be tried is one as to the amount claimed”. The rule needs to be read in tandem with r 136(1) which empowers the Court to give judgment against a defendant if a plaintiff satisfies the Court that the defendant “has no defence to a claim... or to a particular part of any such claim”.
[14] At the High Court hearing, counsel for the appellant said that summary judgment was sought only in respect of liability for breach of the Bill of Rights and trespass (i.e. not misfeasance in public office). As Hammond J noted, it appears that summary judgment can be given under s 137 in relation to liability for one or more causes of action, but not all causes of action, raised in a statement of claim.
[15] Rules 136(1) and 137 are expressed in discretionary terms (“may”): in Ghent v Brinkman HC WN CP379/87 11 September 1987, Eichelbaum J indicated that he would not have allowed an application under r 137 in circumstances where the damages claim opened up the field of conduct of the respective parties, necessitating an examination of all aspects of the relationship between them.
[16] As this Court noted in Westpac Banking Corporation v M M Kembla New Zealand Limited [2000] NZCA 319; [2001] 2 NZLR 298 at [62], novel or developing points of law may require the context provided by trial to provide the Court with sufficient perspective. In such cases summary judgment would be inappropriate.
[17] The plaintiff (in this case the appellants) has the burden of satisfying the Court that the defendant (respondent) has no defence to the particular claim: the Court must be satisfied that the plaintiff’s case (on the issue of liability, in this case) is unanswerable in the sense that there is an absence of any real question to be tried: Pemberton v Chappell [1986] NZCA 112; [1987] 1 NZLR 1 at 3. That requires the Court to determine that the defendant is liable. In circumstances where compensation is discretionary, that requirement will not be met because liability will arise only if the discretion is exercised in the plaintiff’s favour.

The High Court decision

[18] Hammond J concluded that it was not appropriate to enter summary judgment. He did not find it necessary to closely traverse the principles of res judicata and issue estoppel, but noted that, since the prosecutions against Link had been discontinued after it was struck off the register, Link had not been a party to the criminal prosecution before Judge Willy, and therefore there had been no determination as to whether Link’s rights had been breached. He noted that Link was the occupier of the premises which were searched and the most likely owner of the documents that were seized, and that it was Link which carried on the importing business, not Mr Memelink. He thought that any loss arising from any alleged interference with the premises or goods could only be Link’s loss, not that of Mr Memelink. And he noted that the parties to the District Court proceedings and the High Court proceeding were acting in different capacities.
[19] Hammond J also said that Judge Willy did not have before him questions of trespass to land or trespass to goods, nor did he consider the issue of misfeasance in public office (though, in view of the concession that summary judgment was not sought in respect of this claim, that would not appear to be a barrier to the granting of summary judgment in relation to other claims).
[20] Hammond J noted that, even if those problems were overcome, the respondent had correctly submitted that a breach of s 21 of the Bill of Rights did not necessarily give rise to any remedy other than the exclusion of evidence. The Court would need to determine whether compensation should be granted, and this was a discretionary issue which depended on consideration of all relevant factors. He said this required a wide-ranging inquiry into the conduct of both parties which ruled out the possibility of summary judgment.
[21] Hammond J also noted the respondent’s reliance on immunities under s 6(5) of the Crown Proceedings Act and s 228A of the Customs Act. He noted that it was arguable that the appellants would need to establish that the Customs officers undertaking the search did not act in good faith or acted without reasonable care. Judge Willy made no finding on this point.
[22] Hammond J also noted the respondent’s argument that the present proceedings were, in substance, a defamation claim which was statute barred, and which should not be allowed through “the Bill of Rights back door”. This contention arose from the fact that counsel for the appellants had intimated that the appellants intended to claim very substantial damages because the search had taken place while one of Link’s major customers was present, and had led to a withdrawal of patronage from that customer, causing substantial losses. He noted the respondent’s contention that qualified privilege may have applied to such a claim.
[23] Lastly, Hammond J said that a claim based on the withdrawal of patronage by a third party claim would necessitate the Court in determining compensation, to hear evidence from the witnesses to the execution of the search about what actually occurred. This also counted against summary judgment being granted in relation to liability in the present case.
[24] Hammond J noted the need to ensure that plaintiffs relying on the Bill of Rights are not denied a relatively cheap and straightforward remedy, at least as to liability, but he determined that, in the present case, it was necessary for the matter to be the subject of a full trial, and therefore declined summary judgment. He awarded costs to the respondent on a 2B basis.

Issues

[25] The appeal raises a number of issues for consideration. These are:

(a) Whether a finding that there has been a breach of the Bill of Rights resolves the question of liability to pay compensation in relation to that breach. This requires a consideration of the nature of the remedy of compensation for breach of the Bill of Rights;

(b) Whether issue estoppel/res judicata applies in the present situation;
(c) Whether the judgment of Judge Willy is a judgment in rem and, if so, the consequences of that;
(d) Whether it would be an abuse of process for the respondent to contend in the present proceedings that the search undertaken by the Customs officers was not unlawful or unreasonable;
(e) Other matters bearing on the discretion to grant an application for summary judgment on the question of liability;
(f) Whether the costs award made in the High Court was appropriate and the issue of costs in relation to the present appeal.
[26] We will deal with the issues in the order in which they appear above.

Compensation under the Bill of Rights

[27] The essence of the appellants’ case is that, assuming the respondent cannot go behind the District Court finding of a breach of the Bill of Rights, the issue of liability for that breach is resolved, leaving only the amount of compensation to be determined. Thus, the appellants argue, the requirements of r 137 are met and summary judgment on liability should be entered.

Submissions

[28] Counsel for the appellants, Mr Ellis, submitted that, once it was determined that a breach of the Bill of Rights had occurred, then the appellants were “entitled to a full and effective monetary remedy for the breach of their Bill of Rights’ rights”.
[29] For the respondent, Mr Carter said that it does not follow that a breach of s 21 of the Bill of Rights gives rise to a remedy other than the exclusion of evidence remedy which has already been granted in the District Court. He noted the observations made in the judgment in R v Shaheed [2002] 2 NZLR 377 that monetary compensation is not an appropriate response to a breach of s 21 where the prosecution seeks to use the evidence obtained in breach of the Bill of Rights: at [24] (Elias CJ) and [153]-[154] (Richardson P, Blanchard and Tipping JJ).
[30] Dr Butler argued that Hammond J had been correct in his finding at [46] of his judgment that a breach of s 21 of the Bill of Rights did not necessarily give rise to any remedy other than the exclusion of the evidence thereby obtained. He said the Judge was correct in his observation at [47] that compensation is discretionary and depends on a consideration of all relevant factors.
[31] Dr Butler said that the discretionary nature of compensation for a breach of the Bill of Rights was emphasised in the judgments of this Court in Simpson v Attorney-General [Baigent’s Case] [1994] 3 NZLR 667.
[32] The respondent’s case is that, even if the findings of Judge Willy are accepted and applied, the appellants’ case that liability to pay monetary compensation for a breach of s 21 of the Bill of Rights has not been established is still not made out. Judge Willy was not required to determine the compensation point, and the High Court would need to consider and exercise its discretion as to whether compensation was an appropriate remedy in the present case. Mr Memelink has already had a remedy in the form of exclusion of the evidence obtained during the search and the consequent withdrawal of the prosecution against him. Normally, that would be considered to be the most appropriate remedy for a breach of this kind.
[33] Mr Ellis said that this remedy was of no utility to Mr Memelink since he was innocent anyway. The exclusion of evidence has therefore done nothing more than accelerate his exoneration. And, because Link had been struck off the Register of Companies before the District Court hearing, it has not yet had any remedy.

Discussion

[34] We are satisfied that a finding of a breach of the Bill of Rights does not, of itself, establish liability on the part of the respondent to pay monetary compensation. It is clear from the judgments in Baigent’s Case itself that such compensation is discretionary. For example, Casey J said at 692 that the adequacy of a remedy for a breach of the Bill of Rights will be determined by the Courts in the circumstances of each case. He continued:

In some it may be that already obtainable under existing legislation or at common law: in others, where such remedies are unavailable or inadequate, the Court may award compensation for infringement, or settle on some non-monetary option as appropriate.

[35] McKay J said at 718:

It does not follow that the remedy will in every case be an action for damages or monetary compensation. It will depend on the nature of the right and of the particular infringement, and the consequences of the infringement. Where evidence has been obtained for the purposes of a criminal prosecution in a manner which infringes the rights of an accused person under the Act the effective remedy is the prima facie exclusion of that evidence...

[36] Subsequent cases have also made it clear that monetary compensation is discretionary in cases of breaches of the Bill of Rights. In Wilding v Attorney-General [2003] NZCA 205; [2003] 3 NZLR 787, it was noted at [13] that monetary compensation is not the only possible remedy for someone whose guaranteed rights have been infringed, and that relief can be afforded by way of a declaration of breach or, in a criminal case, by exclusion of evidence. Similarly, in P F Sugrue Limited v Attorney-General [2003] NZCA 204; [2004] 1 NZLR 207 (CA) it was noted at [70]:

Baigent damages are a form of compensation which the Court awards, as we have noted, in the exercise of a discretion.

[37] In our view, Hammond J was correct to determine that an entitlement to damages for a breach of s 21 of the Bill of Rights had not been established at this stage of this case. It was therefore inappropriate to enter summary judgment and the Judge was right to decline to do so. Rule 137 requires that the only outstanding issue be the amount of compensation, whereas in this case, even if the appellants’ contentions are upheld, the District Court finding establishes only a breach of the Bill of Rights, but not an entitlement to compensation for that breach. Whether compensation is payable is a matter of discretion, and the exercise of that discretion requires that the Court have before it all relevant matters.
[38] The fact that it was inappropriate to enter summary judgment in relation to the claim for Bill of Rights compensation would not necessarily rule out the entry of summary judgment in relation to the claims for trespass to goods and trespass to land. But, in relation to those actions, the respondent raises affirmative defences under the Customs Act, the Crimes Act, and the Crown Proceedings Act which must be considered before it can be determined that liability to pay damages arises. The potential application of those affirmative defences can be determined only after a full evaluation of the circumstances in which the Collector of Customs gave permission for the Customs Officer to seek the sanction of the Deputy Registrar to rely on the officer’s warrant and the Deputy Registrar granted that sanction, and of the conduct of the Customs officers in the execution of the warrant. Those were not issues which were subject to full consideration by Judge Willy. Thus it would be inappropriate to enter summary judgment in relation to the trespass claims as well.
[39] For these reasons we are satisfied that the appeal must fail. The entry of summary judgment on the question of liability was not appropriate in this case, and Hammond J was correct to decline the application before him. While that makes it unnecessary for us to consider the other matters raised in the course of the appeal for the purpose of determining the appeal itself, we intend to set out our views on those issues to assist the future of the litigation.

Issue estoppel/res judicata

Submissions

[40] Mr Ellis said that all of the constituent elements necessary to establish an estoppel per rem judicatam were established in this case, namely:

(a) The decision relied on was a judicial decision;

(b) The decision was made and pronounced by a judicial tribunal;
(c) The judicial tribunal had competent jurisdiction in that behalf;
(d) The judicial decision was final;
(e) The judicial decision was a determination of the same question as that sought to be controverted in the litigation in which the estoppel is raised, or the decision involved that same question;
(f) The parties to the judicial decision, or their privies were the same persons as the parties to the proceedings in which the estoppel is raised, or their privies. (As an alternative, Mr Ellis argued that Judge Willy’s judgment was a judgment in rem. We will deal with that argument later).
[41] Mr Ellis submitted that items (a), (b), (c) and (d) were self-evident. In relation to item (e), he argued that the decision made by Judge Willy involved the issue as to whether there had been a breach of s 21 of the Bill of Rights, and that that was the identical question being raised in the present case. He also noted that Judge Willy had determined that the Customs officers were trespassers, which he said resolved the questions arising in the actions for trespass to land and trespass to goods.
[42] Mr Ellis argued that the requirement of item (f) was also met because Mr Memelink was a party to the voir dire and to the present proceedings, and, although Link was not a party to the voir dire, it has substantial identity with Mr Memelink as its major shareholder and can therefore be considered to be a privy. Similarly he said that the Court should determine that the respondent in this case (the Attorney-General in respect of Customs) is essentially the same party as the Collector of Customs, the informant in the prosecution against Mr Memelink to which the voir dire related.
[43] Mr Carter argued that res judicata and issue estoppel are doctrines which are appropriate to proceedings in private law, but not applicable to public law proceedings, particularly a claim for public law compensation. He cited Halsbury’s Laws of England (4ed Reissue): Estoppel by Record, Volume 16(2) paragraph 983, in which it is stated that the extent to which the doctrine of issue estoppel is applicable in judicial review proceedings is doubtful.
[44] In any event, Mr Carter argued that the requirements for issue estoppel were not met in this case because the present civil proceedings were not between the same parties/and or their privies and they were not litigating in the same capacity on the same issue. He pointed out that Mr Memelink was the sole defendant in the District Court criminal prosecution, and that the Attorney-General in respect of Customs is the defendant in the present proceeding, in contrast to the informant in the criminal proceedings, who was the Collector of Customs. He said that there was no union or community or mutuality of interest between Mr Memelink and Link, and that it was Link which was the occupier of the premises where the search was conducted and the probable owner of the documents that were seized. He said as Judge Willy had considered only the position of Mr Memelink personally, he had clearly not dealt with the possibility of compensation for loss arising from interference with the land or documents of Link.
[45] Mr Carter said that even if it were determined that the Collector of Customs and the Attorney-General could be seen as effectively the same party for the purposes of issue estoppel, they were not litigating in the same capacity. In particular, the Attorney-General is the defendant in the present case, and has not initiated any proceedings involving relitigation of issues: rather, the Government is defending itself in a civil proceeding for substantial compensation.
[46] Mr Carter also argued that the issues in the present case were not identical to those which were dealt with by Judge Willy, and that this was a requirement of issue estoppel: Craddock’s Transport Limited v Stuart [1970] NZLR 499 at 504.

Discussion

[47] We do not accept the respondent’s submission that issue estoppel does not apply in public law proceedings. We note that in Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273 at 289, Lord Bridge of Harwich expressed the view that res judicata cannot be confined to litigation in the private law field, and must apply equally to adjudications in the field of public law. His observations are supported in the leading text, Spencer Bower, Turner and Handley, Res Judicata (3 ed 1996) at chap 15. We can see no reason in principle why issue estoppel should not apply in the public law field in appropriate cases.
[48] We accept Mr Ellis’ submission that there is sufficient identity between the Collector of Customs as the informant in the criminal prosecution and the Attorney-General in the present proceedings to regard the matter as effectively the same party for the purposes of issue estoppel. However, we agree with Mr Carter’s submission that it is significant that Link was not a party to the District Court proceedings, and so there has been no finding of any breach of Link’s rights in the District Court proceedings. As Hammond J observed, it would be likely that any loss arising from an unlawful search of Link’s premises, and the seizing of documents which were likely to be owned by Link would be Link’s loss. We were told in argument that Link claims that its major customer was present at the time of the search and that, because of this, Link suffered considerable loss of business for which it intends to claim “millions of dollars”. It is not clear to us how Mr Memelink has suffered any separate loss.
[49] Mr Ellis said that the reason Link had not been party to the criminal prosecution was because it had been struck off the register. He said this had been caused by the adverse consequences arising from the search, and that the respondent should not now be able to derive a benefit from that. However there is no evidence before us as to the reason Link was struck off the register and, in the absence of such evidence, we cannot accept that submission.
[50] We also accept the respondent’s submission that there is not absolute identity of the issues in the present proceedings with the issues before Judge Willy. While we accept that Judge Willy made a finding of a breach of s 21 of the Bill of Rights, after a full argument on the issue, he did not need to deal with the allegations of trespass to land and trespass to goods and they would not have been the subject of argument in a voir dire determining admissibility of evidence. It is true, as Mr Ellis submitted, that Judge Willy made the observation that the Customs officers undertaking the search were trespassers, but that was not an issue which he needed to determine for the purposes of the voir dire, and his observation is no more than that: an observation. It is not a finding which is essential to the issues which he was required to determine.
[51] It is clear, therefore, that there is no reason why the respondent should not contest the allegations of trespass to goods and trespass to land. That still leaves the contention that the respondent should not be permitted to relitigate the issue relating to the breach of s 21 of the Bill of Rights. Mr Carter argued that no estoppel applied to that issue either, because a Court determining whether there has been a breach of the Bill of Rights in the context of a compensation claim must consider policy and other issues which would not arise in a Court determining whether a breach of Bill of Rights had occurred in the context of a challenge to admissibility of evidence. We accept that a Court considering a compensation claim will be required to engage in a wider enquiry so as to determine whether the discretion to award compensation should be exercised, but we do not think that this involves the Court in undertaking a different enquiry on the issue of breach than would be involved in a voir dire considering admissibility of evidence.
[52] However, we think there is greater force in the respondent’s argument that there are limitations to the voir dire process which mean that, in this case, information which may be relevant on the issues of the legality and reasonableness of the search were not considered. It is possible that, as a result of discovery, information relating to the search will become available to the respondent which was not available to it in the context of the voir dire where Mr Memelink had no obligation of disclosure to the Crown at all. In Mills v Cooper [1967] 2 QB 459 at 468-469, Diplock LJ described issue estoppel with the following qualifier:

...unless further material which is relevant to the correctness or incorrectness of the assertion and could not by reasonable diligence have been adduced by that party in the previous proceedings has since become available to him.

[53] That observation was endorsed by the House of Lords in Arnold v National Westminster Bank Plc [1991] 2 AC 93 at 109, where Lord Keith of Kinkel said:

In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings.

[54] We agree that such an exception is appropriate. If, as Mr Carter suggested was the case, there is now available to the respondent through discovery material which was not accessible to the prosecution at the time of voir dire as to the circumstances of the search, then that would provide a further basis for concluding that no issue estoppel should apply in the present case in relation to the finding by Judge Willy as to the illegality and reasonableness of the search.
[55] We conclude, therefore, that it is open to the respondent in the present proceedings to challenge the finding made by Judge Willy about the illegality and reasonableness of the search: issue estoppel does not apply in the circumstances of this case.

Judgment in rem

Submissions

[56] Mr Ellis argued that the decision of Judge Willy was a judgment in rem, which meant that it was conclusive against all the world. Thus, it was not necessary to establish that the parties to the present action were the same as those to the proceedings before Judge Willy (or their privies). There is no dispute between counsel as to the meaning of the term “judgment in rem”, both defining it as:

The judgment of a Court of competent jurisdiction determining the status of a person or thing, or the disposition of a thing, as distinct from the particular interest in it of a party to the litigation.

[57] Mr Ellis argued:

The judgment of a criminal Court on a Bill of Rights public law point must be a judgment in rem, it decides the issue of the warrant and confirms a breach of a public law right.

[58] He argued that a conviction is a decision in rem which establishes that the person convicted has been convicted of a certain crime. He said that if a conviction is a judgment in rem, then an acquittal must also be, as must a substantive decision resulting from a voir dire which leads to an acquittal.
[59] Mr Carter pointed out that there was no acquittal in the present case: rather, the prosecution was withdrawn. He said Judge Willy’s decision was nothing more than an evidential ruling leading to exclusion of evidence. He said this clearly did not determine the status of a person or thing or the disposition of the thing.

Discussion

[60] We accept Mr Carter’s submission. In our view the judgment of Judge Willy in the present case was not a judgment in rem. It was simply a ruling about admissibility of evidence made in the course of a summary criminal proceeding. It was not an acquittal of Mr Memelink. The charges against him were withdrawn.

Abuse of process

[61] Mr Ellis argued that it would be an abuse of process for the respondent to argue in the present proceedings that the search was not unlawful and unreasonable, contrary to the findings of Judge Willy. He said that, although Hammond J had noted the abuse of process argument at [38] of his judgment, he had not expressly dealt with it.
[62] Mr Ellis relied on the decision of Randerson J in Walker v Wilson HC AK CP198/00 16 April 2002 and the decision of this Court in Attorney-General v Beggs [2002] NZCA 204; [2002] NZAR 917.

Walker v Wilson

[63] We do not think that Walker v Wilson supports the appellant’s case, as his counsel suggested it did. In that case the plaintiff was the liquidator of a company (Vetec) which had been placed in liquidation on the petition of Customs. Customs claimed that Vetec owed it a considerable sum for customs duty and GST because it had made incorrect declarations as to the value of motor vehicles which it had imported from Japan.
[64] There had been an earlier judicial proceeding brought by a related company of Vetec alleging that Customs had unlawfully seized certain of the imported vehicles. In the course of those proceedings the Judge had made certain findings about the knowledge of the defendant in the proceedings before Randerson J, Mr Wilson, of the false declarations of value by Vetec, and about the reasonableness of Mr Wilson’s actions. Mr Wilson was a director of Vetec at the relevant time.
[65] The proceedings before Randerson J involved an action by the liquidator of Vetec against the directors of Vetec, including Mr Wilson, claiming that they were personally liable for certain outstanding liabilities of Vetec. It was accepted that the only creditor of Vetec was Customs, so that Customs was the party which effectively stood to benefit from the liquidator’s action.
[66] It was argued that the Judge hearing the liquidator’s action should be bound by the findings of fact, which were favourable to Mr Wilson in some respects, which had been made by the Judge in the earlier judicial review proceedings. Randerson J rejected the argument that the liquidator’s proceeding was an abuse of process, given that the company law context of the liquidator’s action differed substantially from the context of the earlier action. He said at [74]-[76]:

[74] It was Mr Kerry Wilson’s company (Fairmont Motors) that brought the earlier proceedings against Customs challenging the seizure of the vehicles. Given the narrower and specific context of the findings in those proceedings, it cannot be said to be unfair to Mr Kerry Wilson to require him to face the liquidator’s allegations without the benefit of binding findings from the earlier proceedings. He was not in those proceedings called upon to answer the allegations of breach of statutory duty and he will have to bear the cost of answering them in the present proceeding in any event.

[75] Nor would it bring the administration of justice into disrepute if the order sought is not made. It is not contrary to the public interest for proceedings of a different nature to be brought at a subsequent time arising out of the same subject matter, nor for specific issues to be considered again in a different context and in the light of different considerations. The possibility of different findings in the present proceeding is not likely in such circumstances to give rise to public interest concerns about the Court’s processes...

[76] On the other hand, I consider that the liquidator would be significantly prejudiced if he were bound by the findings in the earlier proceedings. He would not have the opportunity of exploring the issues in the light of Mr Kerry Wilson’s statutory obligations as a director and the further evidence to be adduced on that issue. There could not be any suggestion in the circumstances that the Court’s processes were being used for an improper purpose. Indeed, it could be said to be contrary to the public interest inappropriately to hamper the liquidator in the exploration of the issues in the present proceeding.

[67] In our view this decision provides no support for the appellant’s position. If anything it provides support for the position of adopted by the respondent, given the different context of the appellant’s civil action for damages in contrast to the District Court ruling on the admissibility of evidence in criminal proceedings.

Attorney-General v Beggs

[68] The Beggs case arose out of an incident in September 1997, when 75 people were arrested in the grounds of Parliament for breach of the Trespass Act 1980. Subsequently, there was a four day hearing in the District Court involving 20 of those who had been arrested and charged with trespass. The District Court Judge determined that the charges of trespass against all defendants should be dismissed.
[69] The police appealed against this decision to the High Court under s 107 of the Summary Proceedings Act 1957 by way of case stated. A Full Court of the High Court answered the questions of law put to it largely in favour of the defendants, and ordered that the prosecutions be permanently stayed: Police v Beggs [1999] 3 NZLR 615. The Full Court held that the Speaker, as occupier of Parliament, exercised powers or rights given by the Trespass Act in the course of his public function and was required to exercise those powers in a manner consistent with the Bill of Rights. Subsequently, the Speaker issued a new ruling about the exercise of his powers under the Trespass Act, in which he accepted that such powers must be exercised consistently with the Bill of Rights. In view of that ruling the Crown did not challenge the decision of the Full Court by way of appeal.
[70] Some of the defendants then brought proceedings in the High Court against the Attorney-General (in respect of the Police) the Speaker and a senior Police Officer seeking compensation of $10,000 each, exemplary compensation and a declaration that their arrest was in breach of the Bill of Rights and constituted assault, false imprisonment, malicious arrest and malicious detention.
[71] The Attorney-General, with the consent of counsel for the claimants, sought, and obtained, an order from the High Court that a question of law be referred to the Court of Appeal for determination under r 419 of the High Court Rules. The question of law asked whether the authority of the Speaker to warn persons assembling in the grounds of Parliament to leave those grounds under s 3 of the Trespass Act was subject to any applicable right under the Bill of Rights, as had been decided by the Full Court in Police v Beggs. The answer sought by the Crown was that the Bill of Rights applied to acts of the Speaker, but the fact that the Speaker may be bound by the Bill of Rights did not render all acts of the Speaker justiciable and that the acts of the Speaker as occupier of Parliament are not justiciable.
[72] In essence, therefore, the Crown was seeking a ruling from this Court which was contrary to the decision made by the Full Court, in circumstances where it had not appealed against the decision of the Full Court.
[73] This Court dismissed the Crown’s application. The Court said at [11]-[14]:

[11] When the application came before this Court and was discussed with counsel, it became clear that for two reasons it should be dismissed.

[12] The first related to the position of the particular parties, particularly the 41 plaintiffs. They are seeking compensation against the Crown for breaches of the Bill of Rights under Baigent’s Case (Simpson v Attorney-General) [1994] 3 NZLR 667. Through the present application, the Crown was now seeking to revisit the very same issue which was resolved against it by the Full Court on the case stated to that Court at the Crown’s request. The Crown in this respect should be in exactly the same position as any other litigant (as indeed s 27(3) of the Bill of Rights makes plain). It could have appealed against the judgment of the Full Court. It did not. We do understand of course the points that the Speaker was not a formal party to the earlier proceedings and that they were criminal, not civil. But the substantive issue is the same and the civil cause of action brought against the Speaker is also brought against the Police.

[13] The second, distinct reason related to the important substantive issues of a constitutional kind raised by the question and the wider context. Those issues ran beyond the arguments which counsel had prepared for the hearing. There are for instance the questions of what licence, entitlement or authority, if any, there is to enter and remain in Parliament grounds. What is the consequence of the grounds being held for “Parliamentary Buildings purposes” (in 1997) and “Parliamentary purposes” (now)? The answer to those questions might be informed by the Bill of Rights even before the examination of the issues should reach the Trespass Act. That Act, it was stressed, requires first that there be a trespass. It then provides means, through the criminal law, of helping enforce the occupier’s rights. It does not itself create the basic right to exclude others.

[14] The Court was not comfortable with the prospect of the present respondents/plaintiffs being drawn into such a large set of issues, given the result of the earlier proceedings. That is not to say of course that the issues presented by the question might not be appropriately brought back to the Court in other proceedings.

[74] Mr Ellis said that Beggs was on all fours with the present case. He said that the Court’s reference to the fact that the Speaker was not a formal party to the proceedings in the full Court was analogous with the present situation where the party to the present case is the Attorney-General but the party to the criminal proceeding was the Comptroller of Customs.
[75] Counsel for the respondent argued that the Beggs decision was not applicable in the present case, because it could be distinguished on a number of bases. These were:

(a) In Beggs, it was the Crown that sought to obtain a ruling of law from the Full Court, and then sought a ruling on a similar matter from the Court of Appeal in subsequent proceedings. In contrast, the voir dire in the District Court was at the application of Mr Memelink, and the present proceedings were instigated by the appellants;

(b) In Beggs, this Court was concerned that important substantive issues of a constitutional kind were raised by the question of law referred to the Court, which would draw the claimants into a large set of issues which were beyond the arguments that counsel had prepared for the hearing. The Court thought that this was inappropriate. No such concern arises in the present case;
(c) The Crown could have appealed against the decision of the Full Court in Beggs, but did not do so. In the present case the Crown had no right of appeal against the decision made by Judge Willy because the ruling was made in the course of a summary prosecution. This contrasts with the situation where a pre-trial ruling is made under s 344A of the Crimes Act in relation to indictable proceedings, in which case there is an appeal (by leave) to this Court.
[76] We accept that there are differences between this case and Beggs. In particular we accept the argument made on behalf of the respondent that different considerations may apply to a party which initiates proceedings seeking to obtain a ruling inconsistent with an earlier ruling, and a party which is engaged in proceedings as defendant. In the leading English decision on abuse of process in relation to criminal proceedings Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1982] AC 529 at 541, Lord Diplock described an action by a convicted person against the police which called into question matters determined in a criminal trial as follows:

The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made.

[77] It is notable that the abuse in that case was the initiation of proceedings. We accept the respondent’s submission that different considerations may arise where a party is responding to allegations made against it in proceedings initiated by another party.
[78] We also accept the respondent’s submission that Beggs differs from the present case because the Crown had a right of appeal in Beggs which it did not exercise, but has no right of appeal in the present case. Mr Ellis suggested that the Crown would still have had an opportunity to commence proceedings for judicial review of the District Court Judge’s decision, but in our view that can be distinguished from a right to have the matter reconsidered by a higher Court on the merits, rather than a limited right in circumstances where the legislature has provided no right of appeal for the Crown in relation to the particular ruling or, in the event that an acquittal results, in respect of the acquittal.
[79] The existence of a right of appeal was an important factor in this Court’s decision in Bryant v Collector of Customs [1984] 1 NZLR 280. In that case, the Court found that it was an abuse of process for the prosecution to rely on a statement by the accused in a prosecution for smuggling goods when that statement had been ruled inadmissible by a District Court judge after a voir dire in an earlier prosecution for theft as a servant of the same goods. Richardson J, giving the judgment of the Court, said at 284 that the proper method of attacking the earlier ruling would have been for the prosecution to have had the question of admissibility reserved for the opinion of this Court under s 380 of the Crimes Act 1961. He said that, since this right had not been exercised, it was improper for the prosecution to raise the issue again in the second case. He added:

...if an unappealed or unsuccessfully appealed final decision of one Court may be reopened by another Court any resulting inconsistency can only bring the administration of justice into disrepute.

[80] We think it is clear from that extract that the existence of a right of appeal significantly affects the analysis of abuse of process. In our view, the absence of a right of appeal in the present case distinguishes it from both Beggs and Bryant.
[81] We also accept that the concerns which this Court had in Beggs about constitutional issues arising, for which counsel had not had an opportunity to prepare, do not arise in this case.
[82] Accordingly, we accept the respondent’s submission that the Beggs case is not authority for the proposition that the respondent’s approach in this case would necessarily amount to an abuse of process.

Discussion

[83] We do not think that it would necessarily be an abuse of process for the respondent to contest the finding that the search in the present case was unlawful and unreasonable in the context of the present proceedings. In our view it is significant that the District Court finding on the issue was made in the context of a voir dire in circumstances where the Crown had no right of appeal, and in circumstances where the Crown had determined that it would be inappropriate to continue with the prosecution. The Crown should not be placed in the position of having to challenge findings on admissibility of evidence in higher Courts for the sole purpose of providing a basis for its defence of any later action for compensation or damages which may be commenced.
[84] We think there is force in the argument made by Mr Butler that the appellant’s position would mean that there would be different rules for those alleging breaches of the Bill of Rights depending on whether prosecutions had been initiated against them or not. In Baigent’s case, there was no criminal process because there was no criminal allegation against Mrs Baigent, and she was required to establish her claim on the normal basis of a civil action, after full discovery, interrogatories and the like. In contrast to that, the appellants in this case seek to rely on the voir dire result, where the Court’s focus was limited to the admissibility of evidence and the rules of criminal procedure applied. Disclosure was required by the Crown, but there was no discovery or any analogous process against the defence.
[85] In the present case, we are satisfied that it will be necessary for the Court to conduct a review of all the circumstances surrounding the sanctioning of the warrant and the conduct of the search in order to determine the Bill of Rights compensation issue. Such a review will also be needed for the resolution of the misfeasance in public office claim, and may also be relevant to the resolution of the respondent’s assertion of immunity defences to the trespass claims. Accordingly, there will be very little additional work required for the Court also to determine the legality and reasonableness of the search.
[86] We conclude that there will be no abuse of process if the Court is required again to address the issue of legality and reasonableness of the search after consideration of all available relevant evidence, including matters which were not considered by Judge Willy in the course of the voir dire in the District Court.

Other matters

[87] For completeness we note that there were a number of other matters canvassed in argument which were said to bear on the discretion to grant an application for summary judgment on the question of liability. We comment specifically on two of them.
[88] The first is an argument by the respondent that the appellants’ action for damages is, in substance, an action for defamation. Counsel noted that the appellants had submitted to the High Court that, during the search undertaken by the Customs officers, the principal client of Link was present, and that Link’s business subsequently suffered as a result leading to substantial economical losses (millions of dollars). Counsel for the respondent described the appellants’ action as “a defamation claim dressed up as a claim under [the Bill of Rights] in circumstances where the appellants are outside the limitation period for bringing a defamation claim and none of the specific pleading requirements relating to defamation proceedings have been observed”. Counsel for the respondent argued that such a defamation claim that is statute barred should not be permitted “through the [Bill of Rights] back door”.
[89] We do not think there is anything in this argument: if the appellants have a sustainable claim for compensation under the Bill of Rights or sustainable claims for damages and for trespass or misfeasance in public office, then they are entitled to pursue those claims. If the consequence of a proved actionable wrong is damage to goodwill, that does not convert the conduct into a publication of defamatory words. Even if the appellants did have grounds for a defamation claim, that would not prevent them from pursuing other available causes of action. The respondent cannot choose the cause of action against it: rather, it must defend those which are commenced and ignore those which are not pursued.
[90] The second matter raised by the respondent was that the application for summary judgment did not include the misfeasance in public office. Counsel for the respondent argued that this meant that the High Court was being asked to enter summary judgment on liability in respect of some causes of action but not on another. The respondent said that it was obvious that evidence on matters such as the motives behind the search and the application for, and sanctioning of, the warrant would be required to establish liability for misfeasance, which meant that a substantial trial on the issue of liability for that claim would be necessary even if the appellants’ summary judgment claim had been granted. We accept that this supports the respondent’s opposition to the entry of summary judgment, but it is not a decisive factor: it is clear that summary judgment could, in appropriate circumstances, be entered in relation to some, but not all, causes of action.

Costs in the High Court

[91] The appellants’ appeal against the award of costs made in the High Court. Hammond J awarded costs on a Category 2B basis, together with reasonable disbursements. He made allowance for second counsel.

Submissions

[92] Mr Ellis said that such an award of costs was inappropriate in relation to a Bill of Rights claim. He was critical of the costs decision of this Court in ER v FR CA228/03 28 April 2004 where costs of $4,000 were awarded to the respondent to an application for leave to appeal in a family law case, where human rights arguments were raised. In that case, this Court categorised the dispute as being primarily a dispute over access to the children of the parties, with the human rights issues being incidental to that private family dispute.
[93] Mr Ellis said that awards of costs in these circumstances provide a chilling effect in human rights cases, particularly those involving novel principles. In support of this he referred to a decision of the United Nations Human Rights Committee, Adrela and Nakkalajarvi v Finland CCPR/C/73/D/779/1997 in which the Committee commented that a “rigid duty under law to award costs to a winning party may have a deterrent effect on the ability of persons who allege their rights under the relevant Covenant have been violated to pursue a remedy before the Courts”.
[94] Counsel for the respondent argued that the High Court award of costs was appropriate, given that the summary judgment application was without merit and contrary to established principles.

Discussion

[95] We see nothing untoward in the award of costs in this case. The appellants sought to invoke the summary judgment procedure in circumstances where the Court found it was inappropriate to do so. The fact that one of the claims made by the appellants was based on the Bill of Rights does not, in our view, alter the fact that this was a civil claim for compensation and an application made in the course of that litigation failed. We therefore reject the appeal against the costs award in the High Court.
[96] We accept that there may be cases where a benign approach to costs may be appropriate in litigation designed to protect the rights of the citizen in the public interest. But we do not see the application for summary judgment in this case as demanding such an approach.

Costs in this Court

[97] We believe that the respondent is entitled to costs in this Court for similar reasons. The respondent is awarded costs of $3,000 together with reasonable disbursements to be agreed by counsel, or if not agreed, to be fixed by the Registrar.

Solicitors:
N Dunning, Wellington
Crown Law Office, Wellington