[1] On 10 March 2003 Gendall J granted leave to the Commerce Commission to file and serve an amended statement of claim. This is an appeal against that judgment.

Background

[2] At the end of 1997 the Commerce Commission brought a proceeding against the Ophthalmological Society of New Zealand and five ophthalmologists alleging collusive conduct by them in breach of s27 of the Commerce Act 1986. The statement of claim alleged that they were parties to an arrangement or understanding that no routine cataract surgery would be performed in Southland other than with the consent of Dr Rogers (the fourth appellant). It was alleged that the arrangement had the purpose or effect of substantially lessening competition in the relevant market (Southland) and that it had prevented or hindered two Australian doctors from entering the market. A second cause of action alleged that Dr Rogers had used a dominant position in the relevant market to restrict the entry of the Australian medical practitioners and others into that market. The Society and the other appellants were said to have aided and abetted him in this.
[3] After the case had been set down the Commerce Commission, by application dated 7 June 2001, sought leave to amend its statement of claim. The amendment would have altered the size of the pleaded relevant market in respect of the s27 cause of action from Southland to a national market. The s36 cause of action was formally abandoned. Leave to amend was granted by the High Court but an appeal against that judgment was allowed. This was on the basis that the proposed amendment amounted to a new cause of action beyond the three year limitation period – see The Ophthalmological Society of New Zealand Incorporated and ors v Commerce Commission CA168/01, 26 September 2001. Leave to appeal to the Privy Council (out of time) was refused by this Court and a petition to the Privy Council for special leave to appeal was dismissed on 14 February 2002.
[4] Other interlocutory applications followed and have been dealt with – see eg The Ophthalmological Society of New Zealand Incorporated and ors v Commerce Commission CA 209/02, 13 February 2003.
[5] On 13 June 2003 the Commerce Commission applied for leave to file an amended statement of claim. That statement of claim pleaded the s27 cause of action in similar terms to the original statement of claim (with the relevant market as Southland) but incorporated further particulars that had been provided in 1998. It also reformulated the description of the arrangement or understanding. In the original version the arrangement was described as follows:

The arrangement or understanding in question was that no routine cataract surgery would be performed in the relevant market by anyone other than Rogers without his prior approval having been sought and obtained.

[6] The proposed amended version describes the arrangement as follows:

The arrangement or understanding in question was that the defendants would oppose ‘itinerant cataract surgery’, more particularly the WTF [Waiting Times Fund] surgery, being carried out in the relevant market. ‘Itinerant cataract surgery’ is a term used variously by the defendants to describe surgery performed by a visiting or non-resident ophthalmologist for a limited period without the support and/or assistance of the local ophthalmologist.

[7] The appellants argued in the High Court that the amendments, especially to the description of the arrangement, introduced a new cause of action. In addition, they argued that the original s27 cause of action relating to Southland was abandoned when the earlier application to amend the statement of claim to a national market was made and that, therefore, this cause of action was in any event barred.

High Court judgment

[8] Gendall J rejected the contention that the s27 cause of action had been abandoned. What the Commerce Commission had sought to do was to expand the relevant market definition. He held that, when the High Court order granting leave to file an amended statement of claim was set aside by this Court, that could only mean that the original statement of claim remained extant.
[9] He also rejected the contention that the proposed amendments to the definition of the arrangement amounted to a new cause of action. The proposed amendments were, in his view, particularisation and not changes in substance.

Was the s27 cause of action abandoned?

Submissions of the parties

[10] Mr Brown QC submitted that, when the Commerce Commission applied to file an amended statement of claim pleading the relevant market as national rather than as Southland, it elected to abandon the cause of action which alleged the relevant market was Southland. If it had wished to maintain that cause of action it should, in his submission, have pleaded, in the proposed amended statement of claim, the “Southland” cause of action as an alternative to the “national” cause of action.
[11] Mr Brown submitted that otherwise an anomalous situation arises. Before setting down the Commerce Commission could have filed the amended statement of claim without leave. If it had done so it presumably would not have included the “Southland” cause of action and this would have been a clear election to abandon it. The Society and the ophthalmologists could have applied to strike out the claim on the basis that the “national” cause of action was new and outside the limitation period. The case would then have been at an end.
[12] In Mr Brown’s submission, if the situation is different after a case is set down, a plaintiff could get an unwarranted advantage by waiting to amend a statement of claim until after setting down. The application for leave would allow the question of the limitation period to be decided before the plaintiff had to make an election to abandon a cause of action, a course not available if the pleadings are amended before setting down. Indeed he submitted that the question of the limitation period would need to be decided at the time of the leave application. Otherwise a defendant risked losing the possibility of taking the limitation point because of the rule that the amended pleadings are deemed to date back to the date on which proceedings are originally issued – see McGechan on Procedure, Brookers HR 187.10.
[13] Mr Knowsley supported and adopted the submissions of Mr Brown on this point.
[14] Mr Upton QC, on behalf of the Commerce Commission, submitted that, although the s36 cause of action was expressly abandoned in the application for leave to amend the statement of claim in 2001, the Commission did not abandon the s27 cause of action. When leave to amend was refused in the Court of Appeal the original s27 cause of action remained in place. The proceeding has not been discontinued and the refusal of leave by the Court of Appeal cannot, in his submission, amount to a striking out of the original cause of action.

Discussion

[15] Mr Brown’s argument is based on the premise that the filing of an application for leave to file an amended statement of claim constitutes an election to abandon any of the causes of action in the original statement of claim that are not carried through into the statement of claim sought to be filed. We are unable to see an application for leave (which clearly may be refused) as an election. By its very nature the posited effect of such an application must be conditional on leave being granted. At its highest therefore the suggested election is conditional only.
[16] In addition, until the new statement of claim is in fact filed consequent on leave having been granted (and assuming no successful appeal), the proceedings must be governed by the original statement of claim. There is no other pleading. If leave is refused the original statement of claim remains the operative document.
[17] This does mean that the situation will differ depending on whether the matter has been set down or not but this is a function of the fact that leave is required to file amended pleadings after setting down. Mr Brown suggested that defendants could be placed at a disadvantage as plaintiffs could wait to amend pleadings until after setting down where there were possible limitation issues. This is possible but it would be a risky strategy as leave could be refused even if the limitation point were decided in the plaintiff’s favour.
[18] We comment, as this was a point raised by Mr Brown, that r187(3)(a) of the High Court Rules would appear to mean that leave is not able to be granted if any fresh cause of action is statute barred. The Court is therefore obliged to decide any limitation question at the time of an application for leave.

Do the amendments introduce a new cause of action?

Submissions of the parties

[19] Mr Knowsley submitted that the amended statement of claim at paragraph 44 introduces a new cause of action, which is statute barred. As originally pleaded, the arrangement was a wide one and would have prevented an ophthalmologist moving to live in Southland and doing routine cataract surgery unless Dr Rogers approved. The proposed amendment would limit the arrangement to apply only to itinerant cataract surgery. This makes it easier to prove and, in his submission, changes the whole nature of the alleged understanding or arrangement such that the appellants would be facing a whole new case. Mr Brown adopted the submissions of Mr Knowsley on this point.
[20] Mr Upton submitted that the essentials of the original s27 cause of action remain the same. The amendments sought merely refine the issues and reformulate the arrangement or understanding so that it is more consistent with the alleged acts of the defendants as previously pleaded. In his submission, the reformulation is the inevitable result of discovery and briefing of evidence and ensures that the arrangement pleaded is consistent with the evidence.

Discussion

[21] We are in agreement with Gendall J that the amendment sought does nothing more than provide particulars of the allegation. The fact that the greater particularity makes the case easier to prove does not create a new cause of action. In addition, the basis of the claim has always been well understood by all parties. This ground of appeal must fail.

Result and Costs

[22] For the reasons given the appeals are dismissed.
[23] Costs of $4500 plus reasonable disbursements (to be set by the Registrar if necessary) are awarded against the appellants.

Solicitors:
Bartlett Partners, Wellington for Appellants in CA59/03
Rainey Collins Wright & Co, Wellington for Appellant in CA60/03
Commerce Commission, Wellington for Respondent

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