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CASE SUMMARY
Rae v Commissioner of Police [2023] NZSC 156
The case arose through an application by the Commissioner of Police under the Criminal Proceeds (Recovery) Act 2009 (CPRA) for a restraining order over funds held in certain New Zealand bank accounts said to be connected with the applicant, Mr Rae. The Commissioner alleged that Mr Rae had unlawfully benefited from significant criminal activity through engaging in money laundering.
Mr Rae unsuccessfully opposed the application for a restraining order in the High Court. He appealed to the Court of Appeal. His appeal was dismissed. However, he identified errors in the Court of Appeal’s substantive decision and applied for that judgment to be recalled and his appeal to be allowed in part. The Court of Appeal declined to recall its substantive decision. Mr Rae then applied to the Supreme Court for leave to appeal against the Court of Appeal’s decision declining to recall its earlier judgment.
Jurisdiction
The jurisdiction of the Supreme Court is statutory. Section 68 of the Senior Courts Act 2016 provides that “The Supreme Court may hear and determine an appeal by a party to a civil proceeding in the Court of Appeal against a decision made in the proceeding, unless” either of two stipulated exceptions applies (neither applying in the present case).
Section 73 then provides that “Appeals to the Supreme Court may be heard only with the court’s leave.” Section 74 sets out the criteria for leave to appeal. Section 74(4) provides that “The Supreme Court must not give leave to appeal to it against an order made by the Court of Appeal on an interlocutory application unless satisfied that it is necessary in the interests of justice for the Supreme Court to hear and determine the proposed appeal before the proceeding concerned is concluded.”
The Court had to determine whether a decision concerning an application to recall an earlier decision is an interlocutory application and, if so, whether s 74(4) prevents the Court from granting leave to appeal against such decisions.
“Interlocutory application” is defined in s 65 as “an application in a proceeding or an intended proceeding for— (i) an order or a direction relating to a matter of procedure; or (ii) in the case of a civil proceeding, for relief ancillary to the relief claimed in the proceeding …”. The Court held that an application for recall fits within the s 65 definition since it seeks “relief ancillary to the relief claimed in the proceeding”. This is reinforced by r 8A(1) of the Court of Appeal (Civil) Rules 2005 which provides that “The Court [of Appeal] may, on an interlocutory application … recall … a judgment”.
However, the Court observed that an application for recall is “an unusual species of interlocutory application”; it is an interlocutory application made after the judgment has been delivered. The Court considered that the drafter of s 74(4) likely had in mind an interlocutory application made prior to the hearing of the substantive appeal, for example an application to adduce fresh evidence. It concluded that the thinking behind s 74(4) appears to be that leave to appeal to the Supreme Court should not be granted before the Court of Appeal has determined the substantive appeal to which the appeal to the Supreme Court relates if the error in the interlocutory decision can be remedied in the course of a later appeal to the Supreme Court against the substantive decision. That line of thinking does not apply to a decision on an interlocutory application to recall.
The Court held that, given the “apparent intention” behind s 74(4), the s 65 definition of “interlocutory application” should not apply in the context of s 74(4). The definitions in s 65 are prefaced with the words “unless the context otherwise requires”; the Court held that the context of s 74(4) does “otherwise require”. Therefore s 74(4) does not preclude an appeal to the Supreme Court in respect of a recall decision.
Leave to appeal and substantive merits
Notwithstanding the Court’s jurisdiction to grant leave, s 74(1) still provides that “The Supreme Court must not give leave to appeal to it unless it is satisfied that it is necessary in the interests of justice for the Court to hear and determine the appeal.” The Court observed that, in the context of an application for leave to appeal against a recall decision it could be expected in almost every case that the applicant’s reasons for applying for recall could be addressed by the Supreme Court in a substantive appeal instead. If they can, it will not be in the interests of justice to grant leave to appeal against the recall decision.
The Court ultimately held that Mr Rae could have raised the matters that founded his recall application in an appeal to the Supreme Court against the substantive decision. It therefore dismissed the application for leave to appeal against the recall decision.
In the circumstances where Mr Rae was a litigant in person and the Court’s approach to applications for leave to appeal of this nature was clarified, the Court treated the application for leave to appeal against the recall decision as an application for an extension of time to apply for leave to appeal against the substantive decision. The Court considered the criteria of leave were satisfied and granted an extension of time. However the Court ultimately dismissed the appeal on the basis that while the Court of Appeal made factual errors in its substantive decision, there was no proper basis for reversing the overall outcome.
Comments
The Supreme Court previously left open the issue of whether jurisdiction exists to appeal a refusal to recall (see Anderson v NZI International Acceptances Ltd [2022] NZSC 85 at [9]; and Smith v Plowman [2022] NZSC 109 at [5]). This judgment not only clarifies the Court’s jurisdiction but also puts to rest “a matter of concern not just to this Court [of Appeal] but to others in the western common law system that disaffected litigants, usually appearing in person, repeatedly make application for recall of judgments which they steadfastly refuse to accept” (Ngahuia Reihana Whanau Trust v Flight CA23/03 26 July 2004 at [3]). As the Court noted in its judgment, it can be expected that “in almost every case” the matters of concern that lead to the recall application could be addressed by the Supreme Court in an appeal against the substantive decision. This is particularly so given the “rarity of legal justification for recalling judgments” (Ngahuia Reihana Whanau Trust v Flight (above) at [3]).
In terms of the substantive merits of the appeal, the judgment is a reminder that the evidential and legal challenges to the Commissioner’s case which are raised before the Court at the restraint stage of the CPRA proceeding can be more appropriately addressed at the forfeiture stage of the proceeding (at [66]). The mere fact that arguments are considered by the High Court at the restraint stage does not necessarily preclude those arguments being raised again in the context of forfeiture because a different threshold is engaged (i.e., ‘reasonable belief’ for restraint, and balance of probabilities for forfeiture). Finally, there is perhaps an under-utilisation of the hardship provisions under the framework of the CPRA, which may accommodate arguments around the potential unfair effect of double (or partially overlapping) recovery which are, at present, primarily conceived as abuse of process challenges to the criminality or unlawful benefit aspect of the Commissioner’s case. The difficulty with adopting the abuse of process approach is that often the facts of the case do not in fact stand up to the standard of true double recovery argument. However, a more granular consideration of the factors at play, and the real measures of injustice, can be taken into account in the discretionary, and highly-contextual rubric of the hardship analysis.
Yvonne Mortimer-Wang (together with junior counsel, Jae Kim) acted as counsel assisting the Supreme Court.
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