100 INVESTMENTS LIMITED v PVG SECURITIES TRUSTEE LIMITED [2020] NZCA 458

100 INVESTMENTS LIMITED v PVG SECURITIES TRUSTEE LIMITED [2020] NZCA 458 [29 September2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA172/2019[2020] NZCA 458BETWEEN 100 INVESTMENTS LIMITEDApplicantAND PVG SECURITIES TRUSTEE LIMITEDRespondentHearing: On the papersCourt: Miller, Cooper and Gilbert JJCounsel: P Michalik for ApplicantK C Francis and W N Fotherby for RespondentJudgment:(On the papers)29 September 2020 at 11 amJUDGMENT OF THE COURTA The proceedings are to be stayed on the present appeal unless or untilleave is granted or declined in the High Court. If leave is granted, thepresent appeal may then continue. If leave is declined, an application forleave should be made to proceed with the present appeal under s 56(5) ofthe Senior Courts Act 2016.B The respondent is entitled to costs for a standard application on a Band Abasis with usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Cooper J)[1] The respondent, PVG Securities Trustee Ltd (PVG), applies to strike outthis appeal on the basis that leave should have been sought from the High Court tofile the appeal. The applicant, 100 Investments Ltd (110 Investments) contends thatleave was not necessary.[2] The judgment of the High Court which 100 Investments wishes to challengewas given on an application it made seeking to enforce an undertaking as to damageswhich was provided by PVG in the context of an application for an interim injunctionissued on 21 December 2018.1 The interim injunction restrained an insurance pay outto 100 Investments for earthquake damage to a building in central Christchurch.[3] In the substantive proceeding, PVG sought a declaration that it was entitled toa substantial part of the settlement payment. It also sought declarations that it had anequitable charge over the settlement payment to secure sums owed to it. However,when the substantive proceeding was determined the declarations sought weredeclined.2[4] 100 Investments then sought to enforce the undertaking as to damages.However, the Judge was not satisfied that it had proved any loss as a result of PVGhaving obtained the interim injunction.3 The application to enforce the undertaking asto damages was therefore dismissed.[5] 100 Investments wishes to appeal against the High Court damages judgment.Its ability to do so without leave depends upon the proper interpretation andapplication of s 56(3) of the Senior Courts Act 2016 (the Act). Under s 56(1)(a) of theAct, this Court is empowered to hear and determine appeals from any judgment, decreeor order of the High Court. However, s 56(2) provides that subs (1) is subject tosubss (3) and (5). Those provisions are relevant to the present issue, as is subs (4).They read as follows:1 PVG Securities Trustee Ltd v 100 Investments Ltd [2020] NZHC 328 [High Court damagesjudgment].2 PVG Securities Trustee Ltd v 100 Investments Ltd [2019] NZHC 1847 [High Court substantivejudgment].3 High Court damages judgment, above n 1, at [28].56 Jurisdiction(3) No appeal, except an appeal under subsection (4), lies from any orderor decision of the High Court made on an interlocutory application inrespect of any civil proceeding unless leave to appeal to the Court ofAppeal is given by the High Court on application made within20 working days after the date of that order or decision or within anyfurther time that the High Court may allow.(4) Any party to any proceedings may appeal without leave to the Courtof Appeal against any order or decision of the High Court—(a) striking out or dismissing the whole or part of a proceeding,claim, or defence; or(b) granting summary judgment.(5) If the High Court refuses leave to appeal under subsection (3),the Court of Appeal may grant that leave on application made to theCourt of Appeal within 20 working days after the date of the refusalof leave by the High Court.[6] As can be seen, except where subs (4) applies, there can be no appeal from anyorder or decision of the High Court made on an "interlocutory application" withoutleave. In the first instance, the application for leave must be made to the High Courtwithin 20 working days after the date of the order or decision or such further time asthat Court might allow.[7] Under subs (5) leave can be sought from this Court, but only wherethe High Court has first refused leave. Subsection (4) constitutes an exception to theleave requirement. No leave is necessary where the decision of the High Court wasone striking out or dismissing the whole or part of a proceeding, claim or defence, orgranting summary judgment. It seems clear from the drafting that subs (4) creates anexception for orders that would otherwise have been treated as interlocutory thusrequiring leave under subs (3).[8] In the present case, it is necessary to properly characterise the nature ofthe High Court damages judgment. If it was interlocutory leave is necessary, asthe exception in subs (4) does not apply.[9] An interlocutory application is defined in s 4 of the Act. The definition readsas follows:interlocutory application—(a) means any application to the High Court in any civil proceedings orcriminal proceedings, or intended civil proceedings or intendedcriminal proceedings, for—(i) an order or a direction relating to a matter of procedure; or(ii) in the case of civil proceedings, for some relief ancillary tothat claimed in a pleading; and(b) includes an application to review an order made, or a direction given,on any application to which paragraph (a) applies[10] For present purposes, we can concentrate on para (a) of the definition. Clearly,the application dealt with in the High Court damages judgment was an application tothe High Court in civil proceedings. It is plainly not an application for an order or adirection relating to a "matter of procedure". But is it an application "for some reliefancillary to that claimed in a pleading"? Counsel for PVG submit that it is. They note:(a) 100 Investments' application was clearly styled as an "interlocutoryapplication", in respect of which costs and filing fees were calculatedaccordingly. Further, the application fell within the definition of"interlocutory application" in the High Court Rules 2016 in whichinterlocutory application means "an application made in accordancewith r 7.19 or 7.41".4 In broad terms, these are applications made inthe course of proceedings which have already been commenced by anappropriate originating process, whether by filing a statement of claimand notice of proceeding, or originating application.(b) The application was an interlocutory application because it did not seekrelief sought in the pleadings. Rather it sought relief which was clearlyancillary to (or related to) what was sought in the pleadings.4 High Court Rules 2016, r 1.3.[11] Counsel for 100 Investments submits to the contrary. Mr Michalik argues thatnotwithstanding the form of the application that had been made to the High Court therelief sought was not interlocutory in nature. He submits that the word "ancillary"used in (a)(ii) of the definition of "interlocutory application" in the Act has a narrowermeaning than simply "related to". He submits the words connote a connection"by way of support", arguing that relief claimed in an application will be "ancillary"to the relief claimed in the pleading where the application is for relief that issubordinate or subservient to and supportive of the party's case for some needed relief.Any application for relief other than the main relief pleaded in a proceeding would beseen as an application for ancillary relief where it supports or assists the party in itscase to obtain that main relief.[12] On this basis, Mr Michalik argues that the High Court damages judgment wasnot a decision on an interlocutory application. The Judge refused the claim fordamages that 110 Investments brought, and the application for damages under theundertaking was not brought in support of any claim to relief set out in the pleadings.Rather, it was brought once PVG's claim had failed in the High Court and dealt withrights that arose consequentially on that failure.[13] Mr Michalik draws an analogy to appeals on costs determinations, which maybe appealable without leave.5 He contrasts such costs determinations with what hedescribes as "normal" interlocutory applications which are dealt with when there is anongoing High Court proceeding. In respect of the latter, a leave requirement has a roleto play by protecting the integrity of the ongoing High Court proceedings.The requirement for leave could operate to prevent a risk of delay or other interferencein the progress to hearing of the substantive claim. Such considerations would notapply in relation to an appeal from a High Court decision on an application fordamages under an undertaking.Analysis[14] In Trotter v Telfer Electrical Nelson Ltd this Court had to consider the questionof whether leave was required for an appeal against a judgment of the High Court5 Tower Insurance Ltd v Kilduff [2019] NZCA 82 at [17].refusing to uphold a protest to the jurisdiction of that Court in respect of a disputewhich, it was argued, fell within the exclusive jurisdiction of the EmploymentRelations Authority or had already been finally settled.6[15] This Court held that the protest to jurisdiction of the High Court, based uponthe jurisdiction of the Employment Relations Authority, related to a matter ofprocedure in the sense that it concerned the proper mode of conducting a legalproceeding to determine the issues between the parties.7 However, the Court also heldthat the relief sought in the protest jurisdiction was "ancillary" to the relief sought inthe statement of claim, for the purposes of sub-para (a)(ii) of the definition ofinterlocutory application.8 The Court said:[21] In respect of the second limb, we also consider that the relief soughtin the protest was "ancillary" to the relief sought in the Statement of Claim.The definition of "ancillary" in the Shorter Oxford Dictionary is subservientor subordinate. In the rules context, the word "ancillary" is used to meancollateral to but flowing out of the relief claimed in the pleadings (for example,r 5.50 — appearance for ancillary matter), or necessary to support or respondto the relief claimed in the pleadings (for example, s 20 of the Senior CourtsAct — ancillary powers of Associate Judge).[22] The relief sought in the application can be seen as ancillary to thatsought in the pleading. It responds to the relief sought but is collateral to it —the application for stay (or dismissal) does not engage directly with the reliefsought, but rather responds that it is relief which should be pursued in anotherforum.(Footnotes omitted).[16] It was also determined that the application to stay or dismiss proceeding dealtwith in the High Court was not within the categories of decision referred to in s 56(4)of the Act.9 The Judge had not entered summary judgment, nor had he struck out ordismissed the whole or part of a claim or defence. He had simply made an orderstaying one of the claims. The Court acknowledged the position would have beendifferent if the Judge had upheld the protest to jurisdiction and dismissedTelfer Electrical's claim.10 In that case, an appeal could have been brought as of right,as it would have fallen within s 56(4).6 Trotter v Telfer Electrical Nelson Ltd [2018] NZCA 231, [2019] NZAR 476.7 At [20].8 At [22].9 At [24].10 At [25].[17] If anything the present is a clearer case. The relief sought by PVG inthe High Court proceeding was a declaration that it was entitled to the insurancemonies. The Court granted an interim injunction restraining the payment of theinsurance money otherwise payable to 100 Investments but the injunction was grantedon terms which included an undertaking as to damages. 100 Investments' claim toenforce PVG's undertaking as to damages was not a claim made in a "pleading". Thedefinition of that term in the High Court Rules is inclusive: the word is said to includea statement of claim, statement of defence, a reply and a counter-claim.11 The wordhas also been used with reference to an originating application.12 But this was not anoriginating application. The relief sought was the payment of damages pursuant to theundertaking. The only way in which this could be described as relief ancillary to thatclaimed in a pleading, is if the application to enforce the undertaking is itselfcharacterised as an application for relief in a pleading. We do not considerthe application should be so described.[18] In our view, the application to enforce the undertaking as to damages wasclearly ancillary in the sense discussed in Trotter. It was "collateral to but flowing outof the relief claimed in the pleadings" and for that reason it was an interlocutoryapplication.13[19] It does not matter that if the High Court judgment is allowed to stand that willeffectively bring the proceeding to an end. Section 56(4) of the Act amounts to a formof statutory recognition that an interlocutory application may have that effect. But itis only certain kinds of interlocutory applications which are referred to in thatsubsection. The implication is that appeals from other kinds of interlocutoryapplications which require leave might be the final procedural event in a proceeding.Result[20] For the reasons we have given, we are satisfied that the leave of the High Courtshould have been sought before the present appeal was filed. We understand that leavemay have been sought in that Court subsequent to the filing of this appeal.11 High Court Rules, r 1.3.12 Group Rentals NZ Ltd v Pramb Wong Enterprises Ltd [1995] 1 NZLR 763 (HC) at 767.13 Trotter v Telfer Electrical Nelson Ltd, above n 6, at [21].[21] Whether or not that is the case, the appropriate course for us now to adopt is tostay proceedings on the present appeal unless or until leave is granted or declined inthe High Court. If leave is granted, the present appeal may then continue. If leave isdeclined, an application for leave to proceed with the present appeal should be madeunder s 56(5).[22] The respondent is entitled to costs for a standard application on a Band A withusual disbursements.Solicitors:Canterbury Legal, Christchurch for ApplicantMeredith Connell, Auckland for Respondent