Hartnell v New Zealand Meat Producers Board [2006] NZCA 2; (2006) 19 PRNZ 713 (14 February 2006)

Last Updated: 28 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA5/05

BETWEEN JOHN WILLIAM HARTNELL
Appellant

AND THE NEW ZEALAND MEAT PRODUCERS BOARD
Respondent

Hearing: 1 December 2005

Court: O'Regan, Robertson and R Hansen JJ

Counsel: R B Squire QC and D J Boldt for Appellant
D J White QC and S B Hill for Respondent

Judgment: 14 February 2006

JUDGMENT OF THE COURT

A The appeal is dismissed.

2. The respondent is entitled to costs of $6,000 together with usual disbursements.
   

____________________________________________________________________

REASONS

(Given by Robertson J)

Introduction

[1] The appellant (Mr Hartnell) mounted a claim in the High Court against the New Zealand Meat Producers Board (the Board) alleging misfeasance in public office and intimidation. Following a five day hearing in the High Court at Wellington, in a reserved decision of 3 December 2004, Miller J found that Mr Hartnell had failed to establish liability on either of the causes of action pursued at trial. Judgment was entered for the Board.
[2] The two issues raised in the points of appeal arise out of r 288 of the High Court Rules. The first is whether a party should be permitted to lead evidence at trial which is in conflict with a sworn answer to an interrogatory, and secondly, whether, because this did occur, the appellant had a fair trial.
[3] In the course of the hearing, Mr Squire QC sought leave to amend the grounds of appeal to include the additional ground that the trial Judge misstated the test of recklessness which he applied in [35] of his judgment when he said:

[35] It is important to be clear as to what is meant by recklessness. The tort rests on abuse of power accompanied by subjective bad faith: Three Rivers District Council v Bank of England [2003] 3 All ER 1, 8-9, per Lord Steyn. Recklessness suffices because it connotes a lack of honesty, something less than an honest attempt to perform the duty. An element of bad faith is essential. Misfeasance in public office is an exception to the general rule that if conduct is presumptively unlawful, a good motive will not exonerate the defendant: Borough of Bradford v Pickles [1895] UKHL 1; [1895] AC 587.

[4] There had been some reference to this point in submissions and the Court allowed the amendment. Accordingly, the third issue for determination is whether the above test correctly states the law. Mr White QC was provided with an opportunity to file additional written submissions on behalf of the Board on the point by 7 December 2005 and Mr Squire QC to respond by 12 December.

Background

[5] The substantive litigation has a lengthy history which is non-controversially reviewed in the judgment under appeal at [3] to [24].
[6] The intricate details of the circumstances leading up to the critical point need not be traversed. Suffice to say that, at the relevant time, the meat industry was self-regulated. The industry’s approach to export meat marketing was co-ordinated by the Meat Planning Council under an agreement between the Board, the Meat Industry Association (MIA), and industry body for meat exporters, and the meat exporters themselves which established a system for granting licences to meat exporters. The Board’s statutory functions included promoting the orderly marketing of New Zealand meat, issuing licences, and monitoring compliance with conditions. Only those granted licences could export to relevant markets. Licencee exporters earned quota from season to season which could be bought and sold between traders. Penalties could be imposed if actual exports by an exporter were greater or less than the exporter’s quota.
[7] During 1994 Mr Hartnell (who had a long history in the meat industry) made an application for a meat exporter’s licence as trustee for a company to be formed.
[8] Within ten days the Board acknowledged receipt of the application and advised it had “no concerns with the application other than with regard to settlement of your overuse of EU VRA”. Quota for the EU was a proportion of the sheep meat which New Zealand could export to the EU under a voluntary restraint agreement between New Zealand and the EU, and quota was referred to in industry documents as “VRA”.
[9] The reference by the Board to overuse of EU VRA is to an unresolved problem about overuse of quota with a company through which Mr Hartnell had previously operated, JW Hartnell & Co Limited (JWH & Co Limited).
[10] The MIA was consulted about Mr Hartnell’s application. It advised that it opposed the grant of a new licence to Mr Hartnell until the overuse situation relating to JWH & Co Ltd had been resolved. The MIA and its members were apparently concerned that a failure to require resolution of the JWH & Co Ltd overuse situation would compromise the integrity of the quote system.
[11] In August 1994, the Board agreed to the granting of a licence to Mr Hartnell on the usual conditions, but with a special condition E requiring resolution of the over-use of quota by JHW & Co Ltd. The condition was as follows:

The licensee acknowledges that J W Hartnell & Co Ltd has over-used EU VRA to the amount of 85.3 metric tonnes for the 1993/94 season. The licensee warrants that it will ensure that J W Hartnell & Co Ltd either purchases from holders of EU VRA sufficient by 31 October 1994 to make good the over-use, or will pay a sum of money to the Meat Planning Council for reimbursement of the over-used VRA on a basis agreed by the Meat Planning Council.

[12] Prior to reaching that decision, the Board had received a policy paper prepared by staff which included the following observations and recommendations:

(1) Mr Hartnell had good contacts in the Caribbean and parts of Europe that could be lost to New Zealand if the application is not approved.

(2) Mr Hartnell has a very good reputation as a trader of New Zealand product and has not been linked with any market destabilising activities in the past.
(3) While we support the concept that a person should not be able to move from one company structure to another, and bypass industry responsibilities, we do not believe this licence application fits the above description. Mr Hartnell has attempted to genuinely remedy the overuse of the EU VRA without success.
(4) If the Board agreed to hold the licence application pending resolution of the EU VRA overuse, then Mr Hartnell could suffer damage in terms of lost business with his prospective clients, and could also be forced into buying EU VRA from the industry at non-commercial prices.

We anticipate that the MIA will appreciate the above views and will advise the Board to that effect prior to the Board meeting.

Recommendation

Staff recommend that J W Hartnell Ltd be granted use of the Board’s licence to export beef, lamb and mutton to the Caribbean, Lebanon, Singapore, Malta and shipstores for various European countries.

[13] The Board’s decision on the point was recorded in the Minutes thus:

106/94 LICENCE APPLICATION

3.8.1994

The Board noted a licence application from J W Hartnell Ltd. It was noted that the MIA opposed the granting of a licence to J W Hartnell Ltd as a company by the name of J W Hartnell & Co Ltd, which has the same principal (ie J W Hartnell), had overused EU VRA and as yet had not repaid the overpayment.

The Board also noted that the MPC discussed the licence application at its meeting on 2 August and that industry members had reiterated their concerns regarding settlement of the overuse of VRA prior to granting a licence to J W Hartnell Ltd.

The Board discussed the application in some detail, noting in particular that Mr Hartnell had sought to buy EU VRA to repay his company’s overuse and that J W Hartnell & Co Ltd have maintained their MPC bond.

The Board agreed that J W Hartnell Ltd be granted use of the Board’s licence MEL.235 to export beef, lamb and mutton to the Caribbean, Lebanon, Singapore, Malta and shipstores for various European countries subject to the usual licence conditions together with the further condition that J W Hartnell Ltd ensure that J W Hartnell & Co Ltd’s overuse of EU VRA will be met by the end of the current VRA season.

It was agreed that the licence conditions should be checked with the Board’s solicitors prior to being finalised and that the MPC secretary should also advise an appropriate formula to be used in the event that J W Hartnell Ltd cannot purchase VRA at realistic prices prior to the end of the VRA season. (emphasis added)

[14] The Chairman of the Board candidly acknowledged in evidence that, at the time the additional condition was imposed, the Board was concerned whether it would be unlawful. No similar condition had been imposed on any other exporter. That was why the Board issued the direction that the condition should be checked with the Board’s solicitor before it was finalised.
[15] A critical issue in the litigation was whether the legality of the additional condition was in fact checked with the Board’s solicitor. The additional condition was included in the licence which was issued a matter of days after the Board meeting. Mr Hartnell was unwilling or unable to comply with the additional condition and accordingly did not use the licence.
[16] In February 1995 an interim injunction was granted in proceedings begun by Mr Hartnell and in April 1995 judicial review proceedings were filed to review the legality of the imposition of the condition E. These two sets of proceedings were discontinued in March 1996. The current proceedings were commenced in 1997.

The interrogatories

[17] In the course of the preparatory aspects of this litigation, in 1999 Mr Hartnell served interrogatories on the Board. One was directed to the question of whether the licence conditions had been checked with the Board’s solicitor. The interrogatory and the Board’s response, dated 9 June 1999, was as follows:

(1) Were the conditions of the Licence MEL.235 granted by the Board to JH (sic) Hartnell Limited to use, checked with the Board’s solicitors prior to being finalised?

No. The Board’s solicitors did not check the conditions of licence MEL.235 granted by the Board to J W Hartnell Ltd, which conditions are set out in the letter dated 9 August 1994 from the Board to Mr Hartnell.

(2) If the answer to 1 is yes:

(a) On what date were they checked by the Board’s solicitors?

(b) Was advice given to the Board by the Board’s solicitors after the conditions were checked?
(c) Was such advice given orally or in writing?
(d) On what date was the advice given?

It is not necessary to answer this interrogatory in view of the answer to interrogatory 1.

[18] Mr Hartnell’s case is that, in light of these answers, no further evidence was required for him to prove that the Board had failed to obtain the advice it resolved to seek in its Minutes and its action thereafter were unlawful.
[19] Notwithstanding the terms of the answer to the interrogatories, in the exchange of briefs of evidence two weeks prior to the hearing, there was a brief from Mr Playford, who was the Secretary of the Board at the relevant time, which included the following:

18. ... I do not remember specifically seeking or obtaining the legal advice which is referred to in the Minutes. However, I was in frequent communication with Rudd Watts & Stone, the solicitors for the Board in relation to a number of issues concerning the Board. My primary point of contact at the relevant time was Mr John Allen, a partner with the firm. I would often seek his informal feedback on matters the Board was considering in addition to formally instructing him in the event that it was determined necessary to do so after initial discussions with him. ...

20. I have been informed by counsel that there are no written notes or formal legal advice contained of the files of the Board or Rudd Watts & Stone in relation to Mr Hartnell’s licence application in August 1994. On reflection that does not entirely surprise me. I cannot recall the specific and relevant events of August 1994. I do however know that it was my practice to undertake what I was required to do in terms of the minutes which I drafted after the meetings.

21. Having regard to my understanding of the Act, and the working relationship I had with the Board’s lawyers, I believe I would have had an informal telephone discussion with the Board’s lawyers to talk the point through. The fact there is no legal advice on the file suggests to me that the result of that discussion was that the Board’s position was confirmed to be a legitimate exercise of its powers. As is evident from my policy paper and my correspondence with Mr Hartnell, if there had been any doubt I would have erred on the side of caution. If there had been any issue raised by the Board’s solicitors then that would have been the subject of a formal instruction to obtain formal legal advice.

22. It was my standard practice as the minute taker for the Board to often finalise the form of the minutes, sometimes a week after the Board meeting. The Board meeting was six days prior to the letter I ultimately sent to Mr Hartnell. I am confident that in that intervening period I had satisfied myself that I had met the note in the minutes.

[20] At trial, Mr Playford indicated that he had not been consulted at the time the interrogatories were answered since he had relinquished the position of Secretary some years earlier. However, he said that several years before trial he had been approached by the Board’s then counsel and had given her the same information as he gave in evidence in Court.

Rule 288 of the High Court Rules

[21] The step to be taken when a party discovers an error in a sworn answer to an interrogatory is dealt with by r 288 of the High Court Rules which provides:

288. Incorrect answer to be amended

If, by reason of any change of circumstances or from the discovery of any error or omission, any statement filed pursuant to any notice given or order made under rule 278 or rule 282 or rule 287 appears to the party by or on whose behalf it was filed to be defective or erroneous, he shall forthwith file and serve an amended statement or, if the amendment is necessary solely to remedy an omission, at his option a supplementary statement, and shall, if the original statement has been verified, verify the amended or supplementary statement.

The High Court judgment

[22] There was no dispute in the High Court that to establish the tort of misfeasance Mr Hartnell had to prove:

(1) That the Board was a public officer purporting to act in exercise of a power conferred by that office;

(2) That the Board exercised its power unlawfully;
(3) That the Board knew or suspected that the particular exercise of its power could cause injury to Mr Hartnell; and
(4) That the Board knew or was reckless to the possibility that its exercise of the power was unlawful.
[23] A final element of the tort was agreed to be loss which was assumed for the purposes of the trial. An order was made pre-trial by Goddard J that liability would be determined before quantum was considered.
[24] In the High Court Miller J found that the first three elements in the tort were satisfied. The Board was a public body exercising powers under the Meat Export Control Act 1921. It knew that Mr Hartnell could suffer injury as a result of the disputed condition it decided to impose on the licence and there was a high likelihood that he would suffer significant loss if the licence was not granted.
[25] The Judge found that the condition complained of was unlawful, but he dismissed the claim because he found, on the balance of probabilities, that Mr Playford did obtain legal advice about the legality of the condition. The Judge found it inherently unlikely that the Board Secretary would fail to follow such a clear instruction from the Board, or alternatively that if Mr Playford had failed to take advice this was due to inadvertence rather than malice.
[26] In coming to this conclusion, the Judge was required to resolve the conflict in evidence which existed between the sworn interrogatory and the affidavit of Mr Playford. In his closing submissions to the Judge, Mr Squire argued that as long as the interrogatory remained uncorrected, the Board could not be heard to assert that the interrogatory was wrong. An attempt to persuade the Court to depart from the answer contained in the interrogatory would amount to a serious, fundamental and ongoing breach of the obligations that the Board and its solicitors owed the Court. Counsel contended that the Judge’s hands were tied; he was required to adopt the evidence in the sworn answer which had not been amended.
[27] Miller J did not accept this submission. He held, in conformity with Kabadanis v Panagiotou [1980] FCA 80; (1980) 47 FLR 221, that answers to interrogatories are evidence against the party who answered them, but they are not conclusive. That party may contradict them by other evidence. In the event, he preferred the evidence contained in Mr Playford’s brief of evidence and confirmed in oral testimony.

Appellant’s submissions

[28] In his written submissions, Mr Squire adopted an ‘absolutist’ position, namely that in its terms r 288 precluded a plaintiff calling evidence which contradicted an answer in an interrogatory unless there had been an amended answer filed. Until and unless that was done, the respondent was “estopped” from leading evidence or advancing any submission that legal advice had been taken prior to condition E being finalised.
[29] Counsel contended that in Australia and England there was not an equivalent to r 288 and as a result Australian or English authorities were unhelpful and uninformative.
[30] In the course of the hearing, Mr Squire varied his submission and put the appellant’s case on the basis that where a party endeavoured to call evidence which contradicted the answering to an interrogatory without complying with r 288, the Judge had a discretion to exclude the evidence, which he had failed to exercise in the present case.
[31] Mr Squire referred to commentary in McGechan on Procedure on rr 288 and 289:

HR288.01 Amended statement required

It is a very serious matter to find an error or defect in an answer to interrogatories. If an error is found, it should not therefore be treated as one would treat an error in the pleadings. A pleading will determine what is in issue, and may be amended without leave at any stage before a praecipe is filed. But an answer to interrogatories is evidence, even if not conclusive. ...

HR289.01 Necessity to tender answers in evidence

For an explanation of the effect of this rule, see Lyell v Kennedy (No 3) (1884) 27 Ch D 1; [1881-5] All ER Rep 814 (CA), at p 15; p 820. Answers to interrogatories are evidence, not pleadings: Kabadanis v Panagiotou [1980] FCA 80; (1980) 47 FLR 221 where a defendant at trial adduced evidence which contradicted answers given to the plaintiff’s interrogatories. See also Stateliner Pty Ltd v Legal and General Assurance Soc Ltd (1982) 29 SASR 16. If a party puts in any answers, they become part of his or her case, although this does not preclude later calling evidence that may contradict the answers. The answers only form part of the total evidence which the Court is required to consider: Endeavour Wines Ltd v Martin and Martin (1948) 92 Sol J 574.

[32] Counsel contended that the Australian decision of Kabadanis v Panagiotou needed to be considered within its own procedural context, which has been defined by the High Court of Australia in Gannon v Gannon [1971] HCA 76; (1971) 125 CLR 629. In that case Menzies J, with whom the majority concurred, said:

[21] Answers to interrogatories are no more than admissions of fact and I have found no sound basis for excluding evidence by a witness called for a party because the evidence to be given would be at variance with answers to interrogatories made by that party which have been put in evidence. It may perhaps happen that a case is so conducted that it would be wrong to admit evidence to impeach answers to interrogatories. This is not such a case and it is not to the point to suggest that, in some cases, the Court, in the interests of justice, would not allow evidence to be called to contradict answers to interrogatories. ... That an admission does not, of itself, prevent the bringing of evidence to the contrary is plain enough but it is said (1) that the rule is different as to “formal admissions”, and (2) that answers to interrogatories fall into this special category. In support of these submissions counsel for the appellant cited several text books: Phipson on Evidence, 11th ed. (1970), p.21; Cross on Evidence, Australian ed. (1970), property. 176-176; and Wigmore on Evidence, 3rd ed. (1940), vol. 4, par. 1058. Reference was also made to a case of Clarke v Clarke (1899) WN 130. For my part I am not prepared to put an admission in an answer to interrogatories on the same footing as an admission in a pleading. A pleading may be amended, but an answer to an interrogatory, once delivered, cannot be withdrawn, although, in a proper case, it may perhaps be possible to obtain leave to answer further. Furthermore, however, and more fundamentally, pleadings determine what is in issue; answers to interrogatories do not. An answer could not do so at the time of its delivery and, in my opinion, it does not do so when it is put in evidence. It is no more than evidence of a fact in issue; that is why it is admitted. I see no reason why it should be regarded as exclusive and exhaustive evidence of that fact. It would, I think, be contrary to principle to permit the plaintiff to call witnesses to prove that the plant was dangerous and deny the defendant the right to call evidence that the plant was not dangerous on the ground that the defendant had, in answers to interrogatories, made admissions supporting the contention that the plant was dangerous.

[33] Mr Squire contended that this statement of the position in Australia was notable in two respects:

First, the High Court left open the possibility that, in an appropriate case, it might be necessary, in the interests of justice, to exclude evidence that contradicts answers to interrogatories. More importantly, the High Court noted that, in Australia, an answer to an interrogatory, once tendered, cannot be amended, and drew a distinction, in this regard, with pleadings. The difference between the Australian jurisdiction, where answers cannot be amended once tendered, and the New Zealand position, where answers must be amended as soon as an error or defect is detected, could not be more stark. In New Zealand, the effect of rule 288 is that an answer to an interrogatory, because of the obligation that it be amended immediately an inaccuracy is detected, represents a formal, and ongoing, statement of a party’s position on the issue to which it was directed.

[34] Reference was also made to the Australian Federal Rules of Civil Procedure, Rule 26(e)(2), which provides:

• (2) A party is under a duty reasonably to amend a prior response to an interrogatory, request for production, or request for admission if the party learns that the response is in some material respect incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.

[35] In that jurisdiction, failure to amend is covered by Rule 37(c)(1) which provides:

• (1) A party that without substantial justification fails to disclose information required by Rule 26(a) or 26(3)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), is not, unless such a failure is harmless, permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed. In addition to or in lieu of this sanction, the court, on motion and after affording an opportunity to be heard, may impose other appropriate sanctions. In addition to requiring payment of reasonable expenses, including attorney’s fees, caused by the failure, these sanctions may include any of the actions authorized under Rule 37(b)(2)(A), (B), and (C) and may include informing the jury of the failure to make the disclosure.

[36] Mr Squire also sought support by drawing an analogy with the provisions relating to discovery. At the material time r 304 of the High Court Rules provided:

304. Incorrect affidavit of documents to be amended

If, by reason of any change of circumstances or because of an error or omission, an affidavit of documents filed under an order made under any of the provisions of rules 294, 299, and 300 to 302 appears to the person making discovery to be defective or erroneous, the person must promptly file and serve an affidavit that corrects or supplements the affidavit of documents.

[37] Counsel’s submission was that the obligation to correct an affidavit of documents under r 304 is similar in nature to the obligation imposed by r 288. As a result, the approach taken to those who fail to correct an affidavit of documents should be applied in the case of a party failing to correct an answer to an interrogatory.
[38] Mr Squire referred to Shipbuilders Ltd v Benson [1992] 3 NZLR 549 as illustrative of the approach taken in cases where a party fails to correct an affidavit of documents. Shipbuilders sought to rely on evidence of the terms of the contract which it had not included in its affidavit of documents on discovery. In the meantime, the original respondent, Mr Donovan (Mr Benson was a trustee of his estate) had died. The Judge excluded the evidence on the basis that it could cause prejudice to the respondent as Mr Donovan could not give evidence about his knowledge of the document’s contents. Shipbuilders appealed. At 553 this Court said:

It was submitted that the appellant at any stage up until trial could have filed a supplementary list of documents under R 304 and thereby pre-empted the objection while leaving the position of the respondents unaltered as to the prejudice flowing from Mr Donovan’s death. It was argued that the prejudice to the appellant in being precluded from meeting the claim other than in an artificial way was a disproportionate sanction for a failure that was not deliberate and which did not deny the respondents prior notice of intended reliance on the documents. This argument overlooks the fact that the appellant was in default under R 304 which requires discovery of further documents “forthwith” and the impact of R 432 which probably would have required leave to file a supplementary list of documents. But that aside, the Judge was required to make a ruling inevitably giving rise to prejudice to one or other party. It was a discretionary decision made in the course of the trial and resulted in the adverse effect falling on the party in default. While it was harsh it was a decision open to the Judge and we will not interfere with it.

[39] Mr Squire acknowledged there is r 313 within this framework which provides:

313. Effect of failure to include document

A document that should have been included in a party’s affidavit of documents may be produced in evidence at the hearing only with the consent of the other party or parties or the leave of the Court.

[40] In Mr Squire’s submission, in the absence of leave to amend the answers, the respondent was not entitled to lead evidence inconsistent with the answers in the interrogatories. He argued that it followed that Mr Playford’s evidence was inadmissible and the Judge was therefore not able to conclude that legal advice had been obtained.

Respondent’s submissions

[41] Mr White contended that there was an inconsistency in the approach adopted for and on behalf of the appellant, both at trial and in the hearing of this appeal. When Mr Playford’s brief of evidence was tendered about two weeks prior to the trial, no objection was taken to any part of it on the basis that there was a conflict between the answer to the interrogatory and what the witness was going to say.
[42] At no point in the course of hearing of the evidence was any objection raised, nor did plaintiff’s counsel request remedial action to deal with potential or actual prejudice.
[43] Mr White argued that this state of affairs was confirmed and exacerbated when there was extensive cross-examination of the Chairman of the Board by Mr Squire about the obtaining of legal advice by the Board on the legality of the condition and in the cross-examination of Mr Playford on the same topic.
[44] Mr White strenuously denied that any estoppel arose with regard to answers to interrogatories. He noted the conventional position that an answer was evidence which was available to be used in a hearing. In this case the plaintiff in the High Court chose to tender it. The Court was presented with conflicting evidence.
[45] The Board’s position was that the matter was covered by general principles of the law of evidence, namely:

(a) Evidence is admissible if it is relevant and does not infringe any applicable exclusionary rule: Cross on Evidence NZ ed., paragraph 1.56.

(b) The exclusionary rules are often relaxed in Judge-alone trials: ibid, paragraph 1.56.
(c) A Judge has a discretion to exclude otherwise admissible evidence, but not to include legally inadmissible evidence: ibid, paragraphs 1.73-1.74.
(d) An appellate Court will not lightly interfere with a Judge’s discretion and decide differently. In order to succeed on appeal the appellant must show that as a matter either of law or discretion the Judge was bound to exclude it: ibid, paragraph 1.72.
[46] Mr White placed particular weight on the decision of McGechan J in Commerce Commission v Fletcher Challenge (No 2) (1989) 2 PRNZ 5, especially where the Judge said at [7]-[8]:

Rule 288 says in summary that if from discovery of error or omission a statement of answers filed appears to the party by whom it was filed to be defective or erroneous he is forthwith to file and serve an amended statement and if necessary verify it. On its face that both demands and authorises the filing of such amended statement at any time down to and including trial and perhaps even afterwards. That would perhaps be a surprising situation.

Generally speaking I do not think it would be so as r 288 should be read in the context of the rules as a whole including r 432 which provides that after the proceeding has been set down for trial no affidavit shall be filed or step taken without leave. Generally speaking I would regard r 288 as subject to r 432 as it is the general policy that steps taken after a proceeding is set down for hearing are under the control of the Court, and indeed to better ensure the control of any frivolous changes to interrogatories designed to frustrate a plaintiff. The same conclusion would be drawn from an application of r 4. Generally speaking, therefore, after a case is set down I would regard leave as necessary and would interpret r 288 as in those circumstances requiring the party concerned to apply for leave to file a corrected answer.

...

... there is in my view a live jurisdictional question as to whether the Court can unscramble the situation, if I may put it that way, where an answer already has been tendered and received in evidence. It may be that pursuant to r 9 such a jurisdiction exists despite the absence of any wording within r 288 and r 289 which obviously and expressly would so permit. ... Alternatively, if leave to file is not granted at all and the answers are not filed, it will remain open to the defendants concerned, if so minded, to call evidence as part of their own case at a later point stating the material contained in the amended answers.

...

I am not going to decide in this case the jurisdictional issue of whether or not the Court can order a party to tender a new answer under pain of having those already in evidence somehow withdrawn. If there is a jurisdiction to do that, which I will leave open, certainly it would be a strong thing to do and an exercise which would require careful reflection and weighing of the consequences.

[47] Consistent with that, Mr White argued that if the Board had sought leave to amend the answer, that would have had no impact on the admissibility of Mr Playford’s evidence. However, in this case there was no objection and the evidence was received. Mr Playford’s evidence contradicted the answers of the interrogatories and the Judge was obliged to make a finding of fact on the point.
[48] The Board contended that the only issue in this case was the sanction for non-compliance with r 288 and the Judge had already indicated the possibility of a discount to the costs to which the Board would otherwise have been entitled because of this dereliction on its part.

Discussion

The status of an answer to an interrogatory

[49] Mr Squire’s initial absolutist position in relation to r 288 is unsustainable as he recognised in the course of the hearing. There is no doubt that parties to litigation should comply with r 288 in order to correct interrogatories which they subsequently realise have been inaccurately answered. But the authorities are clear, even allowing for jurisdictional differences, that a party is not precluded from adducing evidence which is inconsistent with an answer to an interrogatory which has not been corrected (see Gannon v Gannon above at [29]). Where this happens, the Judge must consider and evaluate all available evidence. It will be open to a Judge in the exercise of discretion to refuse to admit evidence which contradicts an answer to an interrogatory, but we would expect this to be rare and only where prejudice would be caused to the other party which cannot be alleviated by other means. Costs awards and adjournments are available to respond to possible prejudice in such circumstances.
[50] We are not to be taken as saying that timely correction of an incorrect answer is not important. Failure to do so may justify a Judge exercising the discretion against the failing party, and the contradiction will often have a bearing on the credibility of the witnesses before the Judge. But generally the answer will become part of the totality of evidence to be considered and evaluated by the Judge with the potential for spirited challenge as to probative value in light of the contradictions. It will carry no special weight by virtue only of its status as a pretrial admission.
[51] In his evidence, Mr Playford made clear that he had not been consulted at the time that the interrogatory had been answered, although he said that then counsel for the Board was aware of his position within a short time. In fairness to counsel then acting for the Board, she has consistently asserted that there was no conflict between the answer to the interrogatory and the testimony. Like Miller J we find that position untenable.
[52] We are sympathetic to the position in which the appellant found himself when the conflict between the answer to the interrogatory and the evidence to be presented at trial became apparent. This difficulty became more acute when Mr Playford’s evidence in cross-examination made it clear that the Board’s position clearly contradicted the answer to the interrogatory. But we do not think that the response to this situation was the exclusion of evidence for the reasons we have given earlier. Rather, we think that the more realistic approach would have been to seek an adjournment so that any further evidence relevant to the issue of legal advice could have been obtained. It may well be that no other relevant evidence exists (and in that respect we note that none has been placed in front of us). The reality is that a conflict in the evidence existed and the Judge had to resolve that conflict. The failure of the Board to comply with r 288 may well lead to a costs sanction. We note that costs are yet to be determined in the High Court.
[53] We find the analogy which Mr Squire sought to draw between r 288 and r 304, and his reliance on the Shipbuilders case, unhelpful. Rule 313 provides a specific sanction for failure to comply with r 304, and there is no equivalent sanction for failure to correct the answer to an interrogatory in breach of r 288. In any event, in the Shipbuilders case the critical witness Mr Donovan had died and so a different set of problems arose. In the present case, there was nothing in the evidence to suggest that the solicitor whom Mr Playford said he consulted was not available. Whatever inquiries were thought to be helpful could have been made and the dereliction in failing to correct the answer responded to in a way in which the ascertainment of the truth was still the primary focus.
[54] We do not accept that the Judge erred in weighing all the evidence on the question of whether legal advice had been sought. The conclusion he reached was one which was reasonably available to him on the totality of the evidence.
[55] The first ground of appeal accordingly must fail.

Unfair trial

[56] The second issue, which is closely allied to the first, was the contention that there was unfairness because of the way matters unfolded. For the reasons we have noted above we conclude that this is not sustainable. It is always easy to be wise after the event, but as things unfolded no application was made for adjournment and no request was made for the Judge to turn his mind to the position which had developed until the very closing stages of the trial. On this point of the case we are of the view that there is strength in Mr White’s submission that there is no evidence at all that any prejudice was created in fact for Mr Hartnell.
[57] If the matter had been adverted to pre-trial or during the hearing of the evidence, a Judge may well have been satisfied that some action was justified on a basis that there was a potential for prejudice. But having let the matter pass and having raised it in the High Court only after evidence had closed, intervention at the appellate stage could be warranted only if the appellant could show that evidence is available which contradicts the Judge’s finding that Mr Playford obtained legal advice in accordance with the Board’s direction.

Recklessness

[58] The third ground of appeal which emerged only in the course of the hearing before us relates to the proper definition of recklessness.

The appellant’s position

[59] The appellant contends that in [35] of the judgment below (as noted in [3] above), the Judge mistakenly imported subjective recklessness into the tort of misfeasance in public office.
[60] Crucial to the appellant’s argument is that the elements of malice/bad faith/dishonesty (which are clearly elements of the tort of misfeasance) can be established by proof of objective recklessness and that recklessness does not require intentional malice, wickedness or dishonesty.
[61] Mr Squire relied on the approach of Lord Hobhouse in Three Rivers District Council v Bank of England [2000] 3 All ER 1 HL at 44:

The official concerned must be shown not to have had an honest belief that he was acting lawfully; this is sometimes referred to as not having acted in good faith. In Mengel’s case (at 357), the expression ‘honest attempt’ is used. Another way of putting it is that he must have shown either to have known that he was acting unlawfully or to have wilfully disregarded the risk that his act was unlawful. This requirement is therefore one which applies to the state of mind of the official concerning the lawfulness of his act and covers both a conscious and a subjectively reckless state of mind, either of which could be described as bad faith or dishonest.

[62] This approach is consistent with that which had been enunciated in R v Cunningham [1957] 2 All ER 412 when it was said:

We have considered those cases, and we have also considered, in the light of those cases, the following principle which was propounded by the late Professor C S Kenny in the first edition of his Outlines of Criminal Law published in 1902, and repeated in the sixteenth edition, edited by Mr J W Cecil Turner, and published in 1952 (ibid., at p 186):

... in any statutory definition of a crime ‘malice’ must be taken not in the old vague sense of ‘wickedness’ in general, but as requiring either (i) an actual intention to do the particular kind of harm that in fact was done, or (ii) recklessness as to whether such harm should occur or not (i.e. the accused has foreseen that the particular kind of harm might be done, and yet has gone on to take the risk of it). It is neither limited to, nor does it indeed require, any ill-will towards the person injured.

The same principle is repeated by Mr Turner in his tenth edition of Russell On Crime. We think that this is an accurate statement of the law. It derives some support from the judgments of Lord Coleridge CJ and Blackburn J in R v Pembliton. In our opinion, the word ‘maliciously’ in a statutory crime postulates foresight of consequence.

...

In our view, it should have been left to the jury to decide whether, even if the appellant did not intend the injury to Mrs Wade, he foresaw that the removal of the gas meter might cause injury to someone but nevertheless removed it.

[63] The appellant argued that to prove malice it is necessary only to prove objective recklessness. This is said to be consistent with the position of this Court in Rawlinson v Rice [1997] 2 NZLR 651 at 658 where McKay J observed:

I think the pleading in paras 51 and 52, properly understood, allege that the defendant acted with the knowledge that he had no jurisdiction. If that is proved, then the requirements for the first element of the tort are satisfied. A deliberate act knowingly or recklessly in excess of one’s powers is sufficient.

...

It is not necessary to show spite or ill will if reliance is placed on the alternative of deliberate or reckless acting outside the defendant’s powers. Nor is it necessary to allege or prove a reason for so acting. ... It is sufficient if [the plaintiff] can show that [the defendant] knew that he was acting outside his powers, or was recklessly indifferent.

The respondent’s position

[64] Mr White, in his supplementary submission, referred to the same authorities, but interpreted them very differently.
[65] His emphasis was elsewhere in the cases. He rooted his case in comments of Blanchard J in Garrett v Attorney-General [1997] 2 NZLR 349 when he said:

We are in respectful agreement with Clarke J that it is insufficient to show foreseeability of damage caused by a knowing breach of duty by a public officer. The plaintiff, in our view, must prove that the official had an actual appreciation of the consequences for the plaintiff, of the disregard of duty or that the official was recklessly indifferent to the consequences and can thus be taken to have been content for them to happen as they would. The tort has at its base conscious disregard for the interest of those who will be affected by official decision making. There must be an actual or, in the case of recklessness, presumed intent to transgress the limits of power even though it will follow that a person or persons will be likely to be harmed.

[66] He contended that the passage recognises the concept of reckless indifference in the tort which has conscious disregard as its base and involves a subjective element on the part of the official concerned.
[67] Subsequently to this, this Court considered the issue again in Rawlinson v Rice in which case McKay J at 658 said:

... it must also be shown that the defendant knew that the conduct would cause damage to the plaintiff, or was recklessly indifferent to the consequences.”

[68] Barker J at 663 said:

The official must exhibit ‘malice’ in the sense of being recklessly indifferent, both as to the exercise of his jurisdiction and as to the consequences for the person harmed.

[69] Tipping J referred, at 665, to “reckless indifference”.
[70] The decision of the House of Lords in Three Rivers District Council was delivered later. Lord Steyn at 9-10 summarised the position:

The basis for the action lies in the defendant taking a decision in the knowledge that it is an excess of the powers granted to him and that it is likely to cause damage to an individual or individuals. It is not every act beyond the powers vesting in a public officer which will ground the tort. The alternative form of liability requires an element of bad faith. This leads to what was a disputed issue. Counsel for the Bank pointed out that there was no precedent in England before the present case which held recklessness to be a sufficient state of mind to ground the tort. Counsel argued that recklessness was insufficient. The Australian High Court and the Court of Appeal of New Zealand have ruled that recklessness is sufficient (see Northern Territory of Australia v Mengel (1995) 185 CLR 307, Garrett v A-G [1997] 2 NZLR 332, Rawlinson v Rice [1997] 2 NZLR 651). Clarke J (at 581) lucidly explained the reason for the inclusion of recklessness:

The reason why recklessness was regarded as sufficient by all members of the High Court in Mengel is perhaps most clearly seen in the judgment of Brennan J. It is that misfeasance consists in the purported exercise of a power otherwise than in an honest attempt to perform the relevant duty. It is that lack of honesty which makes the act an abuse of power.

The Court of Appeal accepted the correctness of this statement of principle ([2000] 2 WLR 15 at 61-62). This is an organic development, which fits into the structure of our law governing intentional torts. The policy underlying it is sound: reckless indifference to consequences is as blameworthy as deliberately seeking such consequences. It can therefore now be regarded as settled law that an act performed in reckless indifference as to the outcome is sufficient to ground the tort in its second form.

Initially, counsel for the plaintiffs argued that in this context recklessness is used in an objective sense. ... The difficulty with this argument was that it could not be squared with a meaningful requirement of bad faith in the exercise of public powers which is the raison d’etre of the tort. But, understandably, the argument became more refined during the oral hearing and counsel for the plaintiffs accepted that only reckless indifference in a subjective sense would be sufficient. This concession was rightly made. The plaintiff must prove that the public officer acted with a state of mind of reckless indifference to the illegality of his act (see Rawlinson case).

[71] Mr White submitted that, in light of these authorities, it was clear that Miller J in the present case correctly, even if succinctly, summarised the relevant law in [35] on the basis that the mental element of the tort does require subjective bad faith and that recklessness will suffice only because it connotes a lack of honesty. A deliberate and dishonest act or omission is required. Inadvertence or oversight is not sufficient.

Discussion

[72] We are satisfied that Mr White’s submission encapsulates the legal position. As was noted by Lord Hobhouse in Three Rivers: “What is not covered is a mere failure, oversight or accident.” In particular His Lordship at 45 observed:

Subjective recklessness comes into the formulation at the first and last stage because it is in law tantamount to knowledge and therefore gives rise to the same liability. (See Mengel’s case (1995) 185 CLR 307 at 369-370.) The word ‘reckless’ is not normally used in relation to this tort; other words are used including ‘blind disregard’. At the first stage the phrase ‘without an honest belief’ in the lawfulness of his conduct best conveys the requisite state of mind covering both actual knowledge and dishonest disregard. At the last stage, the phrase ‘wilful disregard’ best describes the element of subjective recklessness in the third limb and the word ‘risk’ is the appropriate word to use in conjunction with it.

[73] We accept that there was no evidence of subjective bad faith or dishonesty which would establish reckless indifference.
[74] As Mr White submitted, there are in fact positive findings to the contrary which were not challenged on appeal, namely:

(a) The Board genuinely believed that condition E was justified by wider orderly marketing considerations. The relevant evidence is summarised in paragraph [47] of the judgment under appeal. The Learned Judge accepted in paragraph [48] that the Board had been “genuinely concerned” and concluded in paragraph [53] that condition E had been imposed by the Board in “good faith”

(b) The Board, recognising that condition E might exceed its powers, resolved at its meeting on 3 August 1994 that the proposal should be checked with the Board’s solicitors before being finalised. This finding was made by the Learned Judge in paragraph [55] of the judgment under appeal.
(c) The Board was entitled to assume that Mr Playford would have obtained the required advice before writing to the appellant six days earlier. The relevant evidence is summarised in paragraphs [17] and [55] of the judgment under appeal. The Learned Judge found in paragraph [62] of the judgment under appeal that it was “inherently unlikely that any company secretary would fail to take advice when expressly instructed by the Board to do so”. This finding was reinforced by the fact that the Board itself did not meet again for another month when the minutes of the meeting held on 3 August 1994 would have been confirmed.
(d) If Mr Playford did not obtain the legal advice required by the Board, that was “due to inadvertence rather than malice”. There was evidence that Mr Playford was sympathetic to the appellant. The Learned Judge’s finding is in paragraph [63] of the judgment under appeal.
[75] In any event, as Mr White submitted if, contrary to the decision of the House of Lords in Three Rivers an objective rather than a subjective test is adopted, the Board in the circumstances of the present case would have been entitled to rely on the Board’s Secretary to obtain the required advice. The Judge found him to be “a conscientious man and a reliable witness”. The Board’s failure to check that the advice had been obtained did not constitute a dishonest omission on the part of the Board.
[76] We have not been persuaded that the Judge misdirected himself on the legal test. Furthermore, on any assessment, we are not satisfied that the Board was recklessly indifferent.
[77] The unchallenged findings of fact show that the Board was entitled to rely on Mr Playford as honest and diligent in the discharge of his responsibilities. Having set up a mechanism to have the lawfulness of the condition checked, it was not unreasonable for the Board to rely on its being put into effect, and to assume, in the absence of advice to the contrary, that it had been.

Respondent’s alternative submission

[78] Mr White sought if necessary to support the judgment on an alternative ground, namely that the Board’s decision was lawful. Counsel accepted that if the appellant’s grounds of appeal were not sustained, it would not be necessary for him to pursue this approach and we do not consider this argument.

Conclusion

[79] The grounds advanced are all unsustainable and the appeal is accordingly dismissed. The respondent is entitled to costs of $6,000 together with usual disbursements.

Solicitors:
Gresson Dorman & Co, Timaru, for Appellant
Izard Weston, Wellington, for Respondent