SHEA LIMITED trading as STONEWOOD HOMES EAST AUCKLAND v THE DISTRICT COURT AT MANUKAU [2021] NZHC 1880

SHEA LIMITED trading as STONEWOOD HOMES EAST AUCKLAND v THE DISTRICT COURT ATMANUKAU [2021] NZHC 1880 [23 July 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV 2021-404-350[2021] NZHC 1880IN THE MATTER OF an Application for Judicial Review pursuantto the Judicial Procedure Act Section16(3)(a) and/or Part 30 of the High CourtRulesBETWEEN SHEA LIMITED trading as STONEWOODHOMES EAST AUCKLANDApplicantAND THE DISTRICT COURT AT MANUKAUFirst RespondentCEDRIC EDWARDS and NICOLEEDWARDSSecond RespondentsHearing: 21 July 2021Appearances: N Woods for the ApplicantNo appearance for the First RespondentSecond Respondents in personJudgment: 23 July 2021JUDGMENT OF CAMPBELL JThis judgment was delivered by me on 23 July 2021at 2:30pm pursuant to Rule 11.5of the High Court RulesRegistrar/Deputy RegistrarIntroduction[1] Shea Ltd applies for judicial review of the District Court's decision to dismissits appeal against an order of the Disputes Tribunal. The first respondent, the DistrictCourt at Manukau, abides this Court's decision. The second respondents, Mr and MrsEdwards (the Edwards), the successful parties in the Disputes Tribunal and theDistrict Court, oppose the application.[2] In summary, Shea Ltd alleges that:(a) There was a failure of natural justice in the Tribunal, primarily becauseShea Ltd was not given an adequate opportunity to answer the Edwards'claim, and because the Tribunal Referee demonstrated a lack ofimpartiality.(b) The Referee's decision was unreasonable.(c) Judge Bergseng's decision was unreasonable, because he did not dealadequately with the above challenges to the Tribunal decision.[3] I have to decide whether these allegations are available on a judicial review,and if so whether Shea Ltd has established them.Factual background[4] Stonewood Homes Franchisor NZ Ltd (Stonewood) carries on business as ahome builder franchisor. Shea Ltd is one of Stonewood's franchisees.[5] On 30 August 2017, the Edwards entered into a building contract with SheaLtd for the construction of a Stonewood design home on the Edwards' land (the BuildAgreement). The contract price was $1,030,755.65. The Edwards paid a deposit of$51,500 to Shea Ltd.[6] A covenant on the Edwards' land required plans to be approved by a DesignReview Board. The Stonewood design was rejected on 5 October 2017, so theEdwards engaged an independent architect to prepare a design for submission to theDesign Review Board. This design was accepted. Shea Ltd had been retained in therole of builder. However, when it was unable to provide an acceptable quote forconstruction, the Edwards chose to cancel the Build Agreement.[7] The Edwards then sought to recover the $51,500 deposit. Shea Ltd's positionwas that the deposit was not refundable.[8] The parties attempted to resolve this dispute. On 14 May 2018, Ms JeanDougherty, Business Manager at Shea Ltd, emailed the Edwards with a proposal torefund the deposit less certain costs:Hi Cedric and Nicole,Thank you for your patience and we have now received all of the final costsand information for your contract settlement. We have negotiated a creditthrough our head office based on the fees below but typically buildingcontracts are not refundable. Stonewood Homes has made an exception dueto your circumstances have and [sic] passed on our costs to date only. Wehave also not charged you for any of the time during preconstruction advisingyou on you [sic] final architectural concept plans.Fees Amount NotesFranchise fees 15,461.33 1.5%-typically 2.5%SalesCommission15,461.33 Paid to Dennis FilletDesign Fee 575.00 Paid to Synergy forconceptQS Fees 2,071.15 Quantity surveyor timeConcept fees 1,294.61 Drafting fee time34,863.43Deposit paid $51,500.00Credit16,636.57[9] In response, on 15 May 2018 Mr Edwards sent an email to Ms Dougherty.Among other things, he asked when the costs (which Shea Ltd proposed be deductedfrom the deposit) had been paid or generated. Ms Dougherty's email response, on 16May 2018, did not clearly answer Mr Edwards' question. She said Shea Ltd had onlycharged "the minimum costs against the deposit".[10] Mr Edwards was not satisfied with Ms Dougherty's response. On 21 May2018, he sent an email to Steven Zhu, of Stonewood. Mr Edwards expressed concernthat some of the amounts (that is, the costs that Shea Ltd proposed be deducted) "havebeen manufactured". He asked Mr Zhu to investigate whether the franchise fee"exists". That fee (shown by Ms Dougherty's email to be $15,461.33) would havebeen payable or paid, if at all, by Shea Ltd to Stonewood.[11] By email dated 21 May 2018, Mr Zhu declined to answer Mr Edwards'questions. He referred Mr Edwards back to Shea Ltd.[12] Shea Ltd's solicitors, Rice Craig, then emailed a letter to Mr and Mrs Edwardson 25 May 2018. Relevantly, the letter said:6. In reliance on clause 2.3, SHEA's position is that the deposit you paidis not refundable under the [Build Agreement].7. Nevertheless, SHEA reasonably offered to only retain its costs to dateand to refund the remainder of the deposit to you. This is a reasonable(and generous) position.8. You have suggested that SHEA had a duty to include "all additionaland known conditions in the contract". We don't agree that SHEA hadany such duty.9. The costs set out in SHEA's email to you dated 14 May 2018 are allcosts related to steps taken before the DRB rejected the original designand include:(a) The franchise fee payable under SHEA's contract with thefranchisor;(b) Commission paid to a third party under a contract betweenSHEA and the third party;(c) The Design Fee payable under SHEA contract with Synergy;and(d) Reasonable costs allocated for time spent by SHEA'semployees, including for its quantity surveyor's time and fordrafting of the concept plan.Offer to you10. SHEA now offers to refund you the sum of $16,636.57 from yourdeposit, in full and final settlement of all issues to date arising out ofthe [Build Agreement].11. If the offer is not accepted, SHEA reserves the right to retain the fullamount of the deposit.[13] Mr Edwards responded by email on 25 May 2018. He said that before he andMrs Edwards could consider the offer, they needed confirmation of what steps SheaLtd had taken to mitigate the franchise fee. Rice Craig replied on 1 June 2018,advising that Shea Ltd had made an application to have the franchise fee reducedalready – to the 1.5 per cent indicated in Ms Dougherty's email of 14 May 2018.[14] On 6 June 2018, Mr Edwards sent another email to Mr Zhu. Mr Edwardsreferred to Ms Dougherty's email of 14 May 2018 having stated that Shea Ltd hadincurred a franchise fee. Mr Edwards said:We raised some concerns about that the costs in particular the franchise feeand have asked a number of times when it was or will be paid. We have nothad this clarified to date.[15] Mr Edwards concluded the email by putting a proposal to Mr Zhu, whichincluded:The franchise fee has not been paid and we believe there is an opportunity foryou to waive the franchise fee once an application is submitted.[16] On 7 June 2018, Rice Craig emailed Mr and Mrs Edwards, noting that theEdwards had been corresponding with Stonewood. Rice Craig repeated Shea Ltd'soffer in the 25 May 2018 letter, and said that offer would be withdrawn at 5 pm thenext day. Mr Edwards responded by email the same day:We accept the offer as of 25 May and request the refund be deposited in ouraccount within 2 working days. We also request that your client provideconfirmation to us of when and the amount of the franchise fee paid to HQ.[17] Rice Craig replied on 11 June. It did not address Mr Edwards' request forconfirmation of Shea Ltd's payment of the franchise fee to Stonewood:Thank you for advising you accept the full and final settlement offer made bySHEA. SHEA will make payment to you today in the sum of $16,636.57 . Upon payment being made, all issues to date between you and SHEAarising out of the contract will be fully and finally settled.Claim in Disputes TribunalThe claim[18] On 12 July 2018, Mr Edwards lodged a claim in the Disputes Tribunal seekingreimbursement of $15,000 in respect of the $15,461.33 withheld from the depositrefund for the franchise fee. The balance of $461.33 was abandoned to bring the claimwithin the Disputes Tribunal's jurisdiction.[19] Mr Edwards brought the claim against Stonewood, rather than Shea Ltd. Helater explained that this was because he and Mrs Edwards assumed that the franchisefee had been paid to Stonewood.1[20] On 29 October 2018, the hearing of the Edwards' claim commenced but didnot conclude. This was because Referee J S Dryden ordered that Shea Ltd be joinedto the proceeding as second respondent and that Mrs Edwards be added as a jointapplicant. The reasons for this order were apparently (underlining added):2The matter of whether the franchise fee is a cost that can be deducted from thedeposit paid cannot be determined without the involvement of Shea Limited The matter as to whether there is a quasicontractual relationship betweenMr Cedric Edwards and Mrs Nicole Edwards cannot be determined until theissues as to whether a franchise fee has been paid by Shea Limited toStonewood Homes New Zealand Franchisor Limited and what are theconditions of paying for a franchise fee when a contract is terminated.[21] Although Shea Ltd was joined to the proceeding, I was informed that theEdwards were not required to, and did not, file or serve a claim form against Shea Ltd.[22] Despite that, Shea Ltd must have been aware that the Edwards' claim wasconcerned with whether the franchise fee had been paid and could be deducted fromthe deposit. That was apparent from the Referee's reasons for Shea Ltd being joined.3It was also reflected in a memorandum of counsel that Shea Ltd's solicitors, Rice1 Transcript of Disputes Tribunal hearing, 4 March 2019 at 10/1.2 The evidence that the parties produced for the hearing before me did not include a copy of RefereeDryden's reasons. However, in the District Court hearing, Judge Bergseng read out the reasons.I have relied on the transcript from the District Court hearing (which Shea Ltd put in evidencebefore me).3 In the District Court, counsel for Shea Ltd acknowledged that the reasons for the order had beensent to Shea Ltd: transcript of District Court hearing, 3 July 2020 at 25.Craig, filed in advance of the next Tribunal hearing. In that memorandum, dated 20December 2018, counsel asserted the Edwards were estopped from pursuing a claimagainst Shea Ltd because there had been a full and final settlement between thoseparties. Therefore, counsel submitted (my underlining):The issues and particulars relating to the deposit (including the relationshipand payments between the franchisor and franchisee) cannot now be revisitedby the [Edwards].[23] The memorandum was expressed to be by counsel for Shea Ltd. However, thememorandum also addressed the position of Stonewood. Counsel submitted there wasno privity of contract between the Edwards and Stonewood, so that there was no legalfoundation for the Edwards' claim against Stonewood.Disputes Tribunal hearing[24] The Edwards' claim was heard before Referee J Tam on 4 March 2019. SheaLtd challenges the procedural fairness of the Tribunal hearing. I will thereforesummarise what happened at the hearing.[25] The Edwards attended the hearing. Stonewood did not. Ms Doughertyattended, on behalf of Shea Ltd.[26] The Referee began by inviting the Edwards to outline the basis of their claim.Mr Edwards did so.[27] The Referee then invited Ms Dougherty to respond. Ms Dougherty said shewas "only here just to serve" the memorandum from Rice Craig, and that she was"only here as a representative" and was not privy to the arrangements betweenStonewood and Shea Ltd.4[28] The Referee then read Rice Craig's memorandum aloud, asking somequestions of Ms Dougherty as he did so. She was unable to answer his first question.4 Transcript of Disputes Tribunal hearing, 4 March 2019 at 14/1 and 14/24.The Referee observed that was "a bit strange because, look normally, the person whois sitting in here in the seat would be able to assist me".5[29] Having read Rice Craig's memorandum, the Referee understood that RiceCraig's submission was that there had been a full and final settlement, so that therecould be no claim by the Edwards against Shea Ltd.6[30] The Referee then asked the Edwards to respond. Mr Edwards' responsesincluded that if Shea Ltd's settlement offer was made with the knowledge that SheaLtd was not going to pay the franchise fee, then the offer was "based on amisrepresentation and can be revisited".7[31] The Referee then looked at some of the correspondence that had led up to thesettlement agreement. It is apparent from the transcript that his initial view was thatthere was no basis for the Edwards to revisit the settlement. The Referee thenaddressed the position of Stonewood. He raised the possibility of adjournment, andof requiring Stonewood to be at an adjourned hearing, and also for Ms Dougherty "toplease get somebody who can assist me".8[32] The Edwards declined the suggestion of an adjournment. Mr Edwards thenredirected the Referee's attention to the correspondence that led up to the settlementagreement, in particular to the email from Ms Dougherty dated 14 May 2018. Itappears that until seeing Ms Dougherty's email the Referee had assumed that MsDougherty had no direct knowledge of the dispute, because the following exchangethen occurred:9Referee: Hey, that's you Ms Dougherty?Ms Dougherty: Yeah.Referee: What do you say you know nothing about this case?Ms Dougherty: No, well I don't know anything about the legal side. Ronny,the solicitor had told me to come and she said, "Don't get involved because5 At 15/15.6 At 18/20.7 At 20/20.8 At 34/10.9 At 39/15.it's a legal case between the owner and these guys." So that's why she gaveme this letter [the memorandum] to bring and said, "Just be a representative,take notes and that's it."[33] The Referee then observed, referring to Ms Dougherty's email of 14 May 2018,that the basis of the settlement was "costs to date".10 He raised the possibility that ifthe franchise fee had not been incurred by Shea Ltd, he could re-open the settlement.Ms Dougherty responded: "That's up to you." She said that she had been told by theowner of Shea Ltd that the fee was "payable". The Referee asked whether thefranchise fee had been paid since the settlement. Ms Dougherty said she was unsure.The Referee said he would like to give Ms Dougherty five minutes, if she wished, tocall someone and tell him whether or not the franchise fee had been paid. MsDougherty responded: "I do not wish to do that."11[34] The Referee then explained that if the franchise fee had been paid he wouldnot re-open the settlement agreement, but that if it had not been paid he might make adecision that Shea Ltd had to pay back $15,000 to the Edwards. He again asked MsDougherty whether the franchise fee had been paid or not. She said she did not know.12Disputes Tribunal decision[35] Referee Tam ordered Shea Ltd to pay $15,000 to the Edwards. In his reasons,he said that the basis upon which the Edwards agreed to settle was that Shea Ltd wouldonly withhold "costs to date", as recorded in Ms Dougherty's email of 14 May 2018.He said Rice Craig's settlement offer reaffirmed Ms Dougherty's email. He said theEdwards were therefore entitled to get Shea Ltd to account for the franchise feespurportedly paid to Stonewood. His reasons continued:I therefore asked Ms Dougherty to confirm at the hearing if the "franchisefees" of $15,461.33 was actually paid to [Stonewood] either during thesettlement negotiations or anytime after the settlement had been concluded.Ms Dougherty did not respond to this query directly or in any meaningfulfashion. She said that she was unsure of whether the franchise fee has or hasnot been paid. Ms Dougherty simply said she did not know. Ms Doughertyreiterated that she was only directed to attend the hearing and read outprepared written submissions on behalf of [Shea Ltd].10 At 41/1.11 At 41/33.12 At 42.[Shea Ltd] was well aware prior to attending today's hearing that they will beasked to account for payment of the franchise fee.[36] The Referee referred to ss 18(6), 18(7), 19(1)(e) and 19(1)(f) of the DisputesTribunal Act 1988 (the Act). Section 19 relevantly provides:19 Orders of the Tribunal(1) The Tribunal may, as regards any claim within its jurisdiction, make1 or more of the following orders:(e) where it appears to the Tribunal that an agreement betweenthe parties, or any term of any such agreement, is harsh orunconscionable, or that any power conferred by an agreementbetween them has been exercised in a harsh or unconscionablemanner, the Tribunal may make an order varying theagreement, or setting it aside (either wholly or in part):(f) where it appears to the Tribunal that an agreement betweenthe parties has been induced by fraud, misrepresentation, ormistake, or any writing purporting to express the agreementbetween the parties does not accord with their true agreement,the Tribunal may make an order varying, or setting aside, theagreement or the writing (either wholly or in part):[37] The Referee said he drew a negative inference from Ms Dougherty's failure toanswer the question whether the franchise fee had or had not been paid. The inferencewas that the franchise fee either had not been paid or was not payable to Stonewood.The Referee concluded:Consequently, I find that the settlement agreement reached between the partiesin June 2018 has been induced by a misrepresentation by [Shea Ltd] that thefranchise fee has been paid or is payable to [Stonewood]. This is ultimatelynot true.I accordingly reopen the terms of the settlement agreement and require [SheaLtd] to account for the $15,461.33 under the settlement agreement that [SheaLtd] represented to have been withheld from [the Edwards'] depositpurportedly for franchise fee.It would be unconscionable to allow [Shea Ltd] to hide behind the veil ofaccord and satisfaction in the circumstances.[38] The Referee made no orders against Stonewood because it was not privy to theBuild Agreement.District Court decision[39] Shea Ltd appealed from the order of the Disputes Tribunal. The appeal camebefore Judge J B Bergseng on 3 July 2020. The appeal was part-heard because theJudge wanted to obtain a transcript of the Disputes Tribunal hearing. The appealresumed on 4 December 2020. The Judge delivered his judgment on 22 January2021.13[40] By ss 23 and 50(1) of the Act, there is only a limited right of appeal from anorder made by the Tribunal. An appeal may be brought only on the grounds that theproceeding was conducted by the Referee in a manner that was unfair to the appellantand prejudicially affected the result of the proceeding.[41] Judge Bergseng recorded the factors which Shea Ltd submitted comprised theunfairness as follows:14(a) [The decision is] plainly wrong at law and contrary to establishedprinciples of accord and satisfaction.(b) There is no transcript available from the first hearing at which timeSHEA was joined as a party.(c) No properly formed claim against SHEA was ever served and theywere unaware of any reasons or grounds to be named as a party priorto the commence[ment] of the hearing. Without knowing the detail ofa properly articulated claim against it, SHEA was unable to replyfairly.(d) In the circumstances as were known, [it was reasonable for SHEA] torely solely on the memorandum that was presented at the hearing.There was significant prejudice to SHEA as the "two-stage processdescribed in that Memorandum was not followed by the Referee".This resulted in SHEA being unfairly prejudiced at the hearing. TheReferee's failure to consider the two-stage approach was"procedurally unfair".(e) It is submitted that the Referee did not read the memorandum.(f) It is submitted that the Referee applied the wrong onus of proof forputting it on SHEA rather than the Edwards to establish their claim.(g) It is submitted that the Referee in the course of the hearing suddenlychanged their view which was without "any justification nor anyspecified rational basis".13 SHEA Ltd v Edwards [2020] NZDC 25283.14 At [40].(h) It is submitted that the inference drawn by the Referee that thefranchise fee has not been paid or is not payable is not a logicalinference. It is submitted that the Referee has failed to consider factsbefore him and wrongly made assumptions.(i) It is submitted that thereliance on s 18 of the Act does not empowerthe Referee to act "contrary to law, contrary to natural justice, contraryto any rule of just process". It is submitted that the Referee's approachat this junction is arbitrary and that an arbitrary determination isneither just nor fair.(j) It is submitted that the question of whether the franchise fee was paidor payable was "an irrelevant question".(k) It is submitted that there is bias on the part of the Referee in that atpage 44 line 1 the Referee appears to refer to the Edwards as "hisclient".[42] To assess these submissions, the Judge recorded, by close reference to thetranscript, how the hearing before Referee Tam evolved.15 In particular, he recordedthe following features:(a) Ms Dougherty said she was present "only as a representative" forShea Ltd. In response to any questions the Referee asked, she referredto the memorandum that Rice Craig had filed.16(b) The Referee read Shea Ltd's memorandum.17(c) The Referee invited Mr Edwards to respond to Shea Ltd'smemorandum.18(d) The Referee was initially sceptical towards the Edwards' claim in thelight of the full and final settlement agreement.19(e) The Referee's amended view, that the Edwards' claim was valid,followed Ms Dougherty's inability to answer (and unwillingness to15 At [18]–[39].16 At [18] and [21].17 At [22].18 At [25].19 At [26]–[29].seek an answer to) the question whether the franchise fee had beenpaid.20[43] The Judge referred to s 18 of the Act, which sets out the functions of theTribunal. In particular, s 18(6) provides that the Tribunal shall determine the dispute"according to the substantial merits and justice of the case, and in doing so shall haveregard to the law but shall not be bound to give effect to strict legal rights or obligationsor to legal forms or technicalities". The Judge reasoned:[44] The Referee asked both parties questions about the memorandumand was initially sceptical about the Edwards' claim. As is often the case, theReferee approaching the matter with an open mind changed his initial viewand focused on the issue which has always been the primary concern raisedby the Edwards – had the franchise fee actually been paid.[45] The Referee asked Ms Dougherty this question as at March 2019. MsDougherty at one point said she did not think it had been paid. She was giventhe opportunity to make contact with others within the business to have thisconfirmed. She chose not to.[46] The Referee was entitled to draw the inference that he did from theactions of Ms Dougherty, who make [sic] it clear she was there only to presentthe memorandum and nothing more.[47] The Referee clearly came to the view that the settlement was reachedon the basis that costs incurred by SHEA were properly deductible. If there[sic] were not properly payable, then there had been a misrepresentation.[48] That was the very question that the Referee on 29 October 2018 setout in the minute that joined SHEA to these proceedings.Decision[49] For SHEA to say that they were effectively blindsided by the way thatthe proceedings went has no basis. In this case SHEA took a consideredapproach, that they would hide behind "confidentiality". They have neversought to substantiate this claim of confidentiality and the email of 14 May2018 counts against any claim of confidentiality where the details of the feepayable are set out.[50] There is nothing procedurally unfair about he way that the hearingproceeded. By procedural unfairness, it is meant, for example, that a party hasnot been given a proper opportunity to present their case, or a properopportunity to ask questions of witnesses.[51] The mere fact that a Referee may have overlooked or ignored someprovision in the contract or some general principle of law does not provide abasis for an appeal.20 At [30]–[39].[52] What the appellant seeks to do is to present "arguments on the meritsdressed up in procedural robes".21Shea Ltd's application for judicial reviewThe decision under review[44] Shea Ltd's statement of claim stated that the decision under review was thedecision of Judge Bergseng in the District Court (not the decision of the Referee in theDisputes Tribunal). Consistently with that:(a) Shea Ltd named the District Court, but not the Disputes Tribunal, as arespondent.(b) Ms Dougherty made an affidavit in support of the application forjudicial review. She said that Shea Ltd sought an order that the decisionof Judge Bergseng, which she identified as the decision under review,be set aside.[45] That Shea Ltd was seeking review only of the District Court decision wasreinforced by what Ms Dougherty exhibited to her affidavit. She exhibited thedecision of Judge Bergseng and the transcript of the hearing before the Judge on 3 July2020. She did not exhibit the order of Referee Tam or the transcript of the hearingbefore the Referee.22[46] On 3 June 2021, counsel for Shea Ltd, Mr Woods, filed a memorandum. Thissaid that Ms Dougherty's affidavit had "put before the Court the whole of the relevantproceeding under review".[47] On 7 July 2021, Mr Woods filed his synopsis of submissions for the hearing.His synopsis started by stating that the decision under review was that of JudgeBergseng.21 McFarland v Belfast Timber Processing Ltd DC Christchurch CIV-2010-009-2751, 24 November2010.22 The Referee's order and the transcript of the hearing before the Referee were nonetheless beforeme, as they were produced by the Edwards.[48] Nonetheless, there were indications that Shea Ltd also wished to review (in thisapplication) the Referee's decision. Its statement of claim alleged reviewable errorsby the Referee as well as by the Judge, and it sought orders setting aside the decisionsof both the Referee and the Judge. Mr Woods' synopsis concluded by asking for thedecisions of both the District Court and the Disputes Tribunal to be set aside.[49] At the start of the hearing I asked Mr Woods to clarify which decisions SheaLtd was seeking to review. He answered that Shea Ltd was seeking to review thedecisions of both the Judge and the Referee.[50] This was unsatisfactory. I nonetheless allowed Mr Woods to make submissionsdirected towards alleged reviewable errors in the decision of the Referee. This wasbecause his challenge to the Judge's decision was (in large part) that the Referee'sdecision was so wrong (procedurally and substantively) that the Judge's dismissal ofShea Ltd's appeal was unreasonable and unfair. Dealing with that challenge requiredconsideration of the alleged procedural and substantive errors in the Tribunal.Grounds of review[51] Shea Ltd put forward the following grounds of review in its statement of claim:(a) The Referee and the Judge relied on an irrelevant matter, namelywhether the franchise fee had been paid. Shea Ltd said this wasirrelevant "for the deposit was refundable either way".(b) The Referee and the Judge failed to consider relevant matters. Theseincluded that there was no identified misrepresentation relating to thefull and final settlement, and no term of settlement that requiredpayment of the franchise fee.(c) The Referee failed to act in accordance with the principles of naturaljustice, in that he did not provide Shea Ltd with a fair opportunity to beheard. Shea Ltd said no claim form had been filed against it articulatinga ground for setting aside the settlement agreement. Shea Ltd also saidthat the Referee exhibited bias against Shea Ltd. It is alleged that JudgeBergseng failed and refused to consider these matters.(d) The Referee exceeded the jurisdiction of s 18(6) of the Act, in that toset aside a settlement agreement "is seldom if ever (and not in thesecircumstances) in accordance with the substantial merits or justice of acase". Shea Ltd said Judge Bergseng failed and refused to consider thisallegation.(e) The decisions of the Referee and the Judge were "erroneous at law,unreasonable, substantially unfair, and innominate [sic]". Shea Ltd saidthis was because at the time the settlement agreement was entered intothe Edwards knew the franchise fee had not been paid, and so theycould not have been induced by any alleged misrepresentation.[52] These grounds of review are wide-ranging. Mr Woods, in his synopsis and atthe hearing, narrowed Shea Ltd's challenges. The grounds of review that he pursuedwere:(a) There had been a failure of natural justice in the Tribunal, primarilybecause Shea Ltd was not given an adequate opportunity to answer theEdwards' claim that the settlement agreement should be revisited on thegrounds of misrepresentation. Mr Woods also submitted the Refereehad demonstrated a lack of impartiality.(b) The Referee's decision to reopen the settlement agreement wasunreasonable, as the Edwards had not been induced to enter into thatagreement in reliance upon a representation the franchise fee had beenpaid. Mr Woods submitted the Edwards were aware at the time theyentered into the agreement that the franchise fee had not been paid.(c) Judge Bergseng's decision was unreasonable (in a judicial reviewsense), because he did not deal adequately with the above challenges tothe Referee's decision.The issues[53] I have to decide whether the above grounds of review are available on a judicialreview of a decision on appeal from a Tribunal decision, and if so whether Shea Ltdhas established them.[54] I will first outline the relevant legal principles.Legal principles[55] As noted earlier, there is only a limited right of appeal from an order made bythe Disputes Tribunal. An appeal may be brought to the District Court only on thegrounds that the proceeding was conducted by the Referee in a manner that was unfairto the appellant and prejudicially affected the result of the proceeding.23 The DistrictCourt on appeal is not able to examine the merits of the Tribunal decision.24 There isno further right of appeal from a decision of the District Court.25[56] The limited right of appeal informs the scope for judicial review of Tribunaldecisions or of District Court decisions on appeal from the Tribunal. "An applicationfor judicial review cannot be used as a mechanism to bypass the limited rights ofappeal from Tribunal decisions which the legislature has prescribed."26 If a plaintiffcannot come within the limited scope of appeal provided by s 50 of the Act, "theprospects of inducing this Court to intervene by way of review are slight".27 Anapplication for judicial review is not an occasion to review the merits of the decisionreached, either by the Tribunal or by the District Court.28[57] The scope of review is also informed by the purpose of the Act. As the Courtof Appeal said in Graeme Martin Contracting Ltd v Disputes Tribunal, whenconsidering the right to natural justice:2923 Disputes Tribunal Act 1988, ss 23 and 50(1).24 McFarland v Disputes Tribunal [2013] NZHC 2885 at [6].25 Mellow v Tsang (2004) 17 PRNZ 343 (HC).26 McFarland v Disputes Tribunal [2013] NZHC 2885 at [8].27 Evans v Disputes Tribunal at New Plymouth (2000) 14 PRNZ 183 (HC) at [17].28 Kamo Landscape & Quarry Supplies Ltd v Whangarei District Court [2021] NZHC 170 at [19].29 Graeme Martin Consulting Ltd v Disputes Tribunal [2018] NZCA 328, [2018] NZAR 1636.[37] The principles of natural justice undoubtedly apply to hearings in theDisputes Tribunal; these principles apply in all tribunals. However, what isnecessary to facilitate the right to natural justice depends on the particularcircumstances. The question is what is required to ensure fairness in theparticular case. Context is always important, including the significance of thedecision and the purpose of the statute under which the decision-makingpower is exercised.[38] The purpose of the Disputes Tribunal Act is to provide for the promptresolution of disputes involving modest sums. The Tribunal is required todetermine disputes coming before it according to the substantial merits andjustice of the case without being bound to give effect to strict legal rights orobligations, legal forms or technicalities. Orders of the Tribunal are final andbinding on the parties in terms of s 23 of the Act, subject to the limited appealrights conferred under s 50. The only available appeal right in this case is thatthe proceedings were conducted by the referee in a manner that was unfair toGMCL and prejudicially affected the result of the proceedings.(citations omitted)Was there a breach of natural justice in the Tribunal?Was Shea Ltd given inadequate notice of the claim?[58] Mr Woods' primary submission on the natural justice ground was that Shea Ltdwas not given adequate notice of the Edwards' claim. He noted that the Edwards'claim form articulated a claim only against Stonewood. It did not set out the basisupon which a claim could be made against Shea Ltd. The absence of a properlyarticulated claim meant Shea Ltd was not given a fair opportunity to respond. TheEdwards' challenge to the settlement agreement, based on misrepresentation, emergedonly at the hearing. Mr Woods said Shea Ltd could not fairly prepare a response tothat challenge without the hearing being adjourned. The Referee should haveadjourned.[59] Moreover, Mr Woods submitted, Judge Bergseng failed to engage with thisbreach of natural justice. His failure was unreasonable, in a judicial review sense.[60] I accept that a breach of natural justice is a ground on which a party may seekto review a Tribunal decision. It may also be the basis of a ground for reviewing adecision of the District Court on appeal from the Tribunal, if the Court has dealt withthat appeal ground in a way that is itself reviewable.[61] But I reject Mr Woods' submissions that there was any breach of natural justice.It is correct that the Edwards' claim form did not articulate the precise legal basis uponwhich they sought to revisit the settlement agreement. But the basis upon which theEdwards sought to recover from Shea Ltd was known to Shea Ltd in advance of thehearing: it was that Shea Ltd had not actually paid the franchise fee. Thecorrespondence from the Edwards at the time of settlement made clear that theEdwards were concerned about whether the franchise fee had been paid. The orderjoining Shea Ltd to the proceeding stated it was being joined so that a determinationcould be made as to whether that fee was paid by Shea Ltd.[62] Shea Ltd was able to articulate its position in advance of the hearing, throughcounsel, that whether the franchise fee had been paid "cannot now be revisited". SheaLtd chose to take a position (with the assistance of legal advice) that whether thefranchise fee had been paid was irrelevant (which is how Ms Dougherty put it in heraffidavit in support of the application for judicial review). This seems to explain SheaLtd's decision to send a representative to the hearing who was instructed merely to"serve" counsel's memorandum and "take notes".[63] Early on in the hearing Mr Edwards asserted that they could revisit thesettlement agreement on the basis of Shea Ltd having misrepresented that they hadpaid the franchise fee. The Referee gave Shea Ltd fair opportunity to deal with andrespond to that allegation. The fairness of that opportunity has to be assessed not onlyin the context of the purpose of the Act (prompt resolution of disputes involvingmodest sums) but also in the context of the decisions that Shea Ltd took in respect ofthe hearing, on legal advice. Shea Ltd knew, in advance of the hearing, that whetherthe fee had been paid was an issue. It took the position that payment of that fee wasirrelevant. It sent a representative who was unable or unwilling to answer theReferee's question whether the fee had been paid. The Referee explained to MsDougherty, twice, that if she was unable to answer the question he may revisit thesettlement agreement. He offered her the opportunity to call someone else. MsDougherty said she did not wish to do so. Ms Dougherty did not ask for anadjournment (despite the possibility of an adjournment having been raised by theReferee shortly before, in relation to the non-attendance of Stonewood).[64] I conclude that there was no breach of natural justice by the Referee.[65] For completeness, I also reject Mr Woods' submission that Judge Bergsengfailed to address the allegation of breach of natural justice. At [40](c) of his judgmentthe Judge recorded Shea Ltd's argument that, without a properly formed claim, SheaLtd was unable to reply fairly. At [45] the Judge recorded that the Referee asked MsDougherty whether the fee had been paid, and gave her the opportunity to call someoneelse to have this confirmed, which she declined. The Judge concluded that there wasno basis to say that Shea Ltd was blindsided, and that there was nothing procedurallyunfair in the hearing: [49] and [50]. The Judge had already described, in some detail,the course of the hearing.Did the Referee demonstrate a lack of impartiality?[66] In his written synopsis Mr Woods submitted that the Referee had demonstrateda lack of impartiality. Mr Woods did not make any oral submissions on this point,though he did not formally withdraw the submission.[67] For the avoidance of any doubt, I reject the submission. It was based on apassage near the end of the transcript of the Tribunal hearing. The passage appearsafter the Referee had just stated that he would be re-opening the settlement agreementand requiring Shea Ltd to pay $15,000 to the Edwards. The Referee then explained tothe Edwards why he was not making any order against Stonewood:Referee: [T]he reason why I'm not making the order against the firstrespondent [Stonewood], is because there is no privity of contract, there is nocontractual relationship between you and the first respondent, it's always justwith the second respondent and my client can join them incorrectly, and Ithought Ms Dougherty was never involved in this at all, but this verydocument which is going to form the basis for my decision against thecompany is based on your agreement, so I'm not sympathetic with your – I'mnot saying anything stance, I'm sorry.[68] Mr Woods submitted that in that passage the Referee was referring to theEdwards as "my client". I do not accept that. It is difficult to make any sense of thewords "my client" in that passage,30 but the words cannot be a reference to theEdwards, as the Referee had just referred to the Edwards in that passage as "you".30 The transcript has many obvious errors of transcription, and this may be one.Was the Referee's decision to reopen the settlement agreement unreasonable?[69] Mr Woods submitted that the Edwards were aware at the time they entered intothe settlement agreement that the franchise fee had not been paid. He said this wasclear from Mr Edwards' email to Mr Zhu of Stonewood on 6 June 2018. He said thismeant the Edwards cannot have been induced to enter into the agreement in relianceupon a representation the franchise fee had been paid. He submitted, therefore, thatthe Referee's decision to reopen the settlement agreement was unreasonable.[70] This is an attempt to review the merits of the Referee's decision. As explainedin the above review of legal principles, that is not an available ground for judicialreview of a Referee's decision.[71] For completeness, even if it were an available ground of review, I would nothave accepted the underlying premise of Mr Woods' submission. He focused on onepassage in Mr Edwards' email of 6 June 2018. Mr Edwards concluded the email byputting a proposal to Mr Zhu, which included:The franchise fee has not been paid and we believe there is an opportunity foryou to waive the franchise fee once an application is submitted.[72] Mr Woods plucked the words "the franchise fee has not been paid" out of theemail, and said these words showed that the Edwards knew that the fee had not beenpaid. With respect, Mr Woods ignored the context of those words. There was nomeans by which the Edwards could have known whether the fee had been paid. TheEdwards had asked that question of Shea Ltd, and Shea Ltd had not answered. MrEdwards referred to those questions earlier in the same email, commenting "We havenot had this clarified to date." In context, Mr Edwards' concluding words to Mr Zhuwere simply Mr Edwards putting a position. The email as a whole does not supportMr Woods' submission that the Edwards knew the fee had not been paid.Result[73] For the above reasons, I dismiss Shea Ltd's application for judicial review.[74] The Edwards have succeeded in this proceeding. Because they are self-represented, they are not entitled to recover costs from Shea Ltd. They are, however,entitled to recover their reasonable disbursements in this proceeding, such as any filingfees, printing or photocopying costs, or travel costs. I order Shea Ltd to pay to theEdwards their reasonable disbursements that they have incurred in this proceeding.______________________Campbell J