Schmidt v Hair

[2011] NZCA 362

IN THE COURT OF APPEAL OF NEW ZEALAND

CA341/2011
[2011] NZCA 362

BETWEEN  TAYLOR JADE SCHMIDT
First Applicant

AND  ANTHONY SCHMIDT
Second Applicant

AND  NOEL HAIR
Respondent

Hearing:         19 July 2011

Court:             O'Regan P, Glazebrook and Wild JJ

Counsel:         A Schmidt in person for both Applicants
N W Woods for Respondent

Judgment:      2 August 2011 at 10 am

JUDGMENT OF THE COURT

AThe application for special leave to appeal is dismissed.

BThe stay of proceedings issued by the High Court pending determination of the present application is set aside.

CThe applicants must pay to the respondent costs for a standard application on a band A basis plus usual disbursements.  The liability of the applicants for those costs and disbursements is joint and several.

_______________________________________________________________

REASONS OF THE COURT

(Given by O’Regan P)

Introduction

1. The applicants, Mr and Mrs Schmidt, apply for special leave to appeal to this Court against a decision of the High Court.[1] 

   [1]      Schmidt v Hair HC Auckland CIV-2010-404-6804, 3 May 2011.

2. The respondent, Mr Hair, was initially successful in obtaining an order from the Tenancy Tribunal terminating the tenancy of Mr and Mrs Schmidt of a property owned by Mr Hair on 9 April 2009.[2] That decision was overturned on appeal to the District Court on 12 October 2009.[3]  Judge Blackie noted that his decision did not resolve the issue of whether the applicants had a right to remain on the land.  The matter returned to the Tenancy Tribunal.

   [2]      Hair v Schmidt Tenancy Tribunal Manukau 09-01949-MK, 17 April 2009.

   [3]      Schmidt v Hair DC Manukau CIV-2009-092-1684, 12 October 2009.

3. The Tenancy Tribunal terminated the tenancy of the applicants again on 5 August 2010.[4]  The District Court then dismissed an appeal against this decision.[5]  In turn, on 3 May 2011, Miller J dismissed an appeal against the District Court decision, with the net result that the lease was terminated.  It is against Miller J’s decision that the current application for leave is concerned. 

   [4]      Hair v Schmidt Tenancy Tribunal Manukau 10-02511-MK, 5 August 2010.

   [5]      Schmidt v Hair DC Manukau CIV-2010-092-3374, 7 October 2010.

4. Miller J also dismissed a further application for leave to appeal.[6]  However, he did continue the stay of the possession order to provide an opportunity for Mr and Mrs Schmidt to seek special leave from this Court.  They have sought special leave, and under the terms of the stay issued by Miller J, the stay continues in force.  The applicants seek a further stay in the event that special leave to appeal is granted.

   [6]      Schmidt v Hair HC Auckland CIV-2010-404-6804, 26 May 2011.

5. The application for special leave is made under s 120(3) of the Residential Tenancies Act 1986, which provides that this Court may grant special leave to appeal “if, in its opinion, the appeal involves a question of law that, because of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision”.

Background

1. Before turning to the 18 grounds of appeal raised in the application for special leave, we briefly set out the background.  We do so only briefly because there is a full account in the appeal decision of the High Court.[7]

   [7]      At [2]–[33].

2. The property subject to the tenancy is an area of rural land on which there is a dwelling.  It was at one time owned by a company called Schmidt Trustee Ltd, which was apparently associated with the applicants, before being transferred to a company called Ebada Property Investments Ltd, a company associated with a Mr Garrity.  Ebada sold the property to the respondent, who is now the registered proprietor. 

3. The applicants claimed that Ebada held the property on trust for them or a trust associated with them.[8]  They also claimed that they had a fixed term tenancy pursuant to an agreement said to have been signed on 12 November 2008 between Ebada as trustee of a trust called the Excel Estate Trust (apparently also associated with the applicants) as landlord and the applicants as tenants.  This provided for a tenancy for a fixed term to 12 September 2009, with a right of renewal.  This agreement was said to be signed by a woman called Paige Mindel for the landlord.  Mr Garrity testified that he did not know Ms Mindel and no evidence was forthcoming from her.

   [8]Both applicants filed caveats on the title of the property but were not able to maintain them: Schmidt v Hair HC Auckland CIV-2010-404-3987, 23 July 2010; Schmidt v Hair HC Auckland CIV-2010-404-7389, 14 March 2011.

4. The Tenancy Tribunal Adjudicator found against the applicants in relation to the existence of the fixed term tenancy and therefore found that when the property was purchased by Mr Hair there was a periodic tenancy that could be terminated by notice.

5. There were three notices of termination in issue.  The first was sent by email to a solicitor, Mr Darby, on 2 December 2009 and then by email to the applicants on 3 December 2009.  The second was served electronically on the applicants on 15 December 2009 and the third was handed to the applicants at a case management conference before the Tenancy Tribunal Adjudicator on 11 May 2010.

The present application

1. The application for special leave set out 18 specific grounds of the intended appeal, but these were consolidated into seven broader grounds in the submissions filed by the applicants and we will deal with those broader grounds in the order in which they appeared in those submissions.

High Court procedure

1. The applicants say that Miller J conducted the High Court appeal hearing on the wrong basis.  Under s 119 of the Residential Tenancies Act, the right of appeal to the High Court is an appeal on a question of law.  They say that Miller J conducted the hearing, and decided the appeal on the same basis as a District Court Judge would do on a first appeal under s 117 of the Residential Tenancies Act, which provides for an appeal by way of rehearing.

2. We do not consider that Miller J erred in the approach he took to the appeal.  He was faced with broad ranging submissions on a variety of issues and did his best to deal with them within the limitations of a s 119 appeal.  The fact that he dealt with the consequences of rulings made on points of law did not mean that he adopted a wrong approach to the appeal before him.

Cross-appeal

1. The respondent filed a cross-appeal in the High Court but Miller J recorded that it was not pursued, that the point in filing it was that the respondent wished to support the District Court judgment on other grounds, namely the validity of the first and third notices (the District Court Judge had upheld the second).  Miller J recorded that no notice of cross-appeal was required for that purpose.  But because the applicants complained that they were not ready to deal with arguments relating to the first and third notices at the High Court hearing, he gave them the opportunity to make submissions after the hearing.

2. We do not see that this situation gives rise to any question of law requiring further attention of this Court, nor do we consider that there was any risk of injustice from what occurred.

Alleged bias in High Court

1. The applicants argue that a number of statements made by Miller J during the hearing and findings made in his judgment illustrated bias.  The applicants particularly highlighted the fact that Miller J made a comment indicating scepticism about the existence of Paige Mindel and the possibility that Mrs Schmidt may, in fact, have been Paige Mindel.  He was disabused of that by both the applicants and the respondents and it does not feature in the judgment.  A large number of other allegations are made, many of which are allegations of bias because findings were made against the applicants.  We do not consider there is any proper basis for appeal on a question of law on this issue.  The law is clearly stated in recent decisions of the Supreme Court[9] and no question of public importance arises.  We do not see any realistic prospect that the conduct of Miller J would meet any of the relevant tests for bias.

Bias: Tenancy Tribunal/District Court

[9]Saxmere Company Ltd v Wool Board Disestablishment Company Ltd [2009] NZSC 72, [2010] 1 NZLR 35; Saxmere Company Ltd v Wool Board Disestablishment Company Ltd (No 2) [2009] NZSC 122, [2010] 1 NZLR 76; see also Muir v Commissioner of Inland Revenue [2007] NZCA 334, [2007] 3 NZLR 495.

1. The applicants also submit that Miller J erred in assessing whether or not the District Court Judge applied the appropriate legal test in assessing the allegations of bias against the Tenancy Tribunal Adjudicator.  The allegations of bias against the Adjudicator were rejected by the District Court and, because of the complaints about the way the District Court dealt with those allegations, were also reviewed in some detail by the High Court.  In both cases the Judges applied orthodox legal principles to the allegations that were made and found them to be unfounded.  No question requiring further attention from this Court arises.

Section 136 of the Residential Tenancies Act

1. Miller J found that service of the first notice on the applicants’ solicitor by email was effective.  The applicants point out that s 136 was amended with effect from 1 October 2010 (that is, after the service of the notices in the present case) to specifically permit service by email.  Thus they said Miller J had applied the law retrospectively.  We think it is clear from Miller J’s judgment that he found that the notice was validly served under the law that was in force at the relevant time.  No issue requiring further determination by this Court arises.

Apparent authority

1. This issue concerns the service of the first notice on the solicitor for the applicants.  The applicants had advised the solicitor for the respondent that service could be effected on their solicitor.  When the notice was emailed to their solicitor, he signified receipt but argued that he did not have instructions to accept it.  Miller J applied the law on apparent authority and found that, having represented that their solicitor was authorised to receive service, the applicants had conferred on him apparent authority to accept it and could not now resile from that.  This was an orthodox application of the law and no question of law requiring the attention of this Court arises.  The applicants also take issue with technical legal points about the service of the second and third notices, but we are satisfied that none of these points are such as to justify a third appeal to this Court.

Fair hearing in the District Court

1. The applicants argued that they did not get a fair hearing in the District Court because of the late availability of a transcript of the Tenancy Tribunal proceedings and inadequate time to prepare.  Those matters were carefully evaluated by the High Court Judge.  He found that the process met the minimum standards of procedural fairness, but accepted that the District Court Judge had been wrong to say that the allegation of bias against the Tenancy Tribunal adjudicator had not been pursued.  To remedy this Miller J considered those arguments in some detail himself, and rejected them.

2. We can see no error in the approach taken by the Judge and certainly no question of law that merits a further appeal.

Result

1. We are satisfied that there are no questions of law or otherwise that merit appeal under the tests set out in s 120(3) of the Residential Tenancies Act.  The application for leave to appeal is therefore dismissed.

Stay

1. As the dismissal of the application for leave to appeal signals the end of these proceedings, there is no call for the stay to be further extended and we therefore set it aside.

Costs

1. The respondent is entitled to costs for a standard application on a band A basis and usual disbursements.

Solicitors:
RiceCraig, Papakura for Respondent