NAVARATNAM v HG METAL MANUFACTURING LIMITED [2023] NZCA 10

NAVARATNAM v HG METAL MANUFACTURING LIMITED [2023] NZCA 10 [14 February 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA692/2020[2023] NZCA 10BETWEEN VASHIHARAN NAVARATNAMFirst AppellantSHERINE NAVARATNAMSecond AppellantAND HG METAL MANUFACTURINGLIMITEDRespondentCA152/2022BETWEEN VASHIHARAN NAVARATNAMFirst AppellantSHERINE NAVARATNAMSecond AppellantAND HIGH COURT AT AUCKLANDFirst RespondentHG METAL MANUFACTURINGLIMITEDSecond RespondentCourt: Courtney, Thomas and Peters JJCounsel: First Appellant in Person for CA692/2020 and CA152/2022Second Appellant in Person in CA692/2020 and CA152/2022T B Fitzgerald and B J Dominikovich for Respondent inCA692/2020 and Second Respondent in CA152/2022No appearance for First Respondent in CA152/2022Judgment:(On the papers)14 February 2023 at 10 amJUDGMENT OF THE COURTA The application to recall [2022] NZCA 425 is declined.B HG Metal is entitled to indemnity costs of $6,590.75 against Mr and MrsNavaratnam jointly and severally.____________________________________________________________________REASONS OF THE COURT(Given by Courtney J)[1] On 8 September 2022, on the application of HG Metal Manufacturing (HGMetal), this Court struck out two appeals brought by Mr and Mrs Navaratnam.1Mr and Mrs Navaratnam have applied to have the judgment recalled. HG Metalopposes recall and seeks indemnity costs.Application for recall[2] The appeals that were struck out arose from proceedings brought by HGMetal to enforce an arbitral award obtained against Mr and Mrs Navaratnam inSingapore in 2020, which had resulted in judgment being entered against both Mr andMrs Navaratnam.[3] The appeal under CA152/2022 related to judicial review proceedings broughtto challenge Katz J's decision entering judgment against Mr Navaratnam.2Mr Navaratnam had filed his appeal against Katz J's judgment out of time. Havingbeen refused an extension of time to appeal, he brought judicial review proceedings.Jagose J struck out the judicial review proceedings as an abuse of process becausejudicial review is not available to challenge decisions of the High Court.3 This Courtstruck out the appeal against Jagose J's decision as being an abuse of process, for thesame reason.41 Navaratnam v HG Metal Manufacturing Ltd [2022] NZCA 425 [Court of Appeal strike outdecision].2 HG Metal Manufacturing Ltd v Navaratnam [2021] NZHC 1920.3 Navaratnam v High Court of Auckland [2022] NZHC 371.4 Court of Appeal strike out decision, above n 1, at [26].[4] The appeal under CA692/2020 related to Woolford J's decision enteringjudgment against Mrs Navaratnam by default.5 This appeal was struck out for theappellants' failure to comply with court directions.6[5] In both appeals Mr and Mrs Navaratnam sought to raise an argument that hadbeen determined by Katz J, namely that HG Metal had failed to satisfy the statutoryrequirements for recognition and enforcement of the award under art 35(2) of theArbitration Act 1996 because it had not provided a properly authenticated copy of theaward. Mr and Mrs Navaratnam maintained that, as a result of this failure, theythemselves were not obliged to take any steps. In striking out the appeals weconsidered that seeking to revisit this issue was an abuse of process because it soughtto circumvent the principle of finality by relitigating an issue that had already beendetermined.7[6] Mr and Mrs Navaratnam's positions differ and we address each separately.[7] As to Mr Navaratnam, in a decision delivered on 30 August 2022, AssociateJudge Gardiner made an order adjudicating Mr Navaratnam bankrupt.8 Uponadjudication Mr Navaratnam's rights in the litigation vested in the Official Assigneeunder the Insolvency Act 2006.9 This includes the power to discontinue theproceedings.10 The Official Assignee has elected to do so and has filed a Notice ofDiscontinuance in respect of both proceedings. Mr Navaratnam does not accept theOfficial Assignee's right to discontinue. However, there is no doubt that the OfficialAssignee has that power and Mr Navaratnam has no standing in the proceedings. Hisapplication for recall must fail.[8] Mrs Navaratnam has not been adjudicated bankrupt and we therefore considerher application for recall against the relevant principles. The circumstances in which5 HG Metal Manufacturing Ltd v Navaratnam HC Auckland CIV-2020-404-1955, 22 October 2020[Minute of Woolford J].6 Court of Appeal strike out decision, above n 1 at [48].7 Court of Appeal strike out decision, above n 1, at [25]–[26].8 HG Metal Manufacturing Ltd v Navaratnam [2022] NZHC 2183.9 Insolvency Act 2006, s 64.10 Schedule 1(b).a judgment can be recalled are very narrow. They were summarised in the decision inHorowhenua County v Nash (No 2):11Generally speaking, a judgment once delivered must stand for better or worsesubject, of course, to appeal. Were it otherwise there would be greatinconvenience and uncertainty. There are, I think, three categories of cases inwhich a judgment not perfected may be recalled – first, where since the hearingthere has been an amendment to a relevant statute or regulation or a new judicialdecision of relevance and high authority; secondly, where counsel have failedto direct the Court's attention to a legislative provision or authoritative decisionof plain relevance; and thirdly, where for some other very special reason justicerequires that the judgment be recalled.[9] It is well recognised that a judgment should not be recalled in order torecognise a challenge to substantive findings of fact or law, nor to allow a party torecast arguments previously made, nor to advance arguments that could have beenraised earlier but were not.12 However, the grounds on which Mrs Navaratnam seeksto recall the judgment are essentially the same as the grounds that have been advancedin previous litigation in this matter.[10] Mrs Navaratnam identifies the grounds for recall as the need to correct errorsor omissions in the judgment, namely: failure to determine an issue properly advanced;procedural irregularity; misapprehension by the Court as to the grounds of appeal andsubmissions made; procedural irregularity of the orders previously sealed; and that theCourt was not directed to an earlier decision about the guarantee that was theunderlying debt in the proceeding. These grounds have, as their underlying theme, thesame argument about the validity of the guarantee and the arbitral decision based onan assertion that HG Metal has not satisfied the statutory requirements for recognitionand enforcement of the award under the Arbitration Act. This argument has beenfinally determined and cannot be reopened, no matter how it is recast.[11] This is not an appropriate case for the recall of the decision. Mrs Navaratnam'sapplication to recall is declined.11 Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633. See also Erwood v Maxted[2010] NZCA 93, (2010) 20 PRNZ 466 at [3].12 Faloon v Commissioner of Inland Revenue (2006) 22 NZTC 19,832 (HC) at [13].Costs[12] HG Metal seeks indemnity costs of $6,590.75 againstMr and Mrs Navaratnam. The Official Assignee has not expressed any view on theissue of costs. Mr and Mrs Navaratnam oppose the granting of indemnity costs. Theysay that it is premature to consider the question of indemnity costs until their argumentregarding art 35(2) of the Arbitration Act has been determined.[13] HG Metal's claim for indemnity costs is based on Mr and Mrs Navaratnam'sliability under the guarantee they both signed on 24 September 2013, which gave riseto the arbitral award against them. Clause 6 of the guarantee provides:The Guarantor shall indemnify HG Metal against the full costs (includinglegal fees as between solicitor and client) of enforcing or attempting to enforcethis Guarantee.[14] In the proceedings determined by Katz J, HG Metal had sought indemnity costsin reliance on cl 6. In a subsequent costs decision, Katz J reviewed the basis on whichindemnity costs might be awarded pursuant to a contractual obligation.13 Sheconcluded that the costs HG Metal had incurred in applying to recognise and enforcethe award in New Zealand were costs of "enforcing or attempting to enforce" theguarantee for the purposes of cl 6.14 Katz J's finding that Mr Navaratnam was liablefor indemnity costs arising from the guarantee finally determined this issue and meansthat Mr Navaratnam is liable for indemnity costs in respect of the current appeal.[15] There is no basis on which to differentiate Mrs Navaratnam's position fromthat of her husband on this point. She was a co-guarantor and subject to the sameprovisions, including cl 6.[16] We would add that, for the reasons canvassed, the application for recall was anabuse of process. Two factors — the clear attempt to raise unmeritorious argumentsthat have been finally determined in the High Court and Mr Navaratnam's decision tobring the recall application knowing that he had already been bankrupted — would, in13 HG Metal Manufacturing Ltd v Navaratnam [2021] NZHC 2498.14 At [21].themselves, have justified indemnity costs, had they not been imposed under theguarantee.Result[17] The application to recall [2022] NZCA 425 is declined.[18] There is an order that HG Metal is entitled to indemnity costs of $6,590.75against Mr and Mrs Navaratnam jointly and severally.Solicitors:Bell Gully, Auckland for HG Metal Manufacturing Ltd