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High Court of New Zealand Decisions |
Last Updated: 20 November 2018
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IN THE HIGH COURT OF NEW ZEALAND WHANGANUI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGANUI ROHE
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CIV-2016-483-16
[2018] NZHC 2980 |
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BETWEEN
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MARK ALBERT GOODIER AND NICHOLA JANE GOODIER AS
TRUSTEES OF THE GOODIER FAMILY TRUST
Plaintiffs
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AND
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THE EARTHQUAKE COMMISSION
First Defendant
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AND
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IAG NEW ZEALAND LIMITED
Second Defendant
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Hearing:
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17 – 28 September 2018
8 – 10 October 2018
12 October 2018
16 October 2018
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Appearances:
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G D R Shand and N T P Lala for the Plaintiffs
B A Scott and J Y Moran for the First Defendant
R W Raymond QC and S K Swinerd for the Second Defendant
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Judgment:
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16 November 2018
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JUDGMENT OF CULL J
[plaintiffs’ amendment of pleadings]
[1] The trial of this civil proceeding commenced in Whanganui on 17 September 2018, and at the end of two weeks, on 28 September, was adjourned for a further week’s hearing in Wellington from 8 to 12 October. At the request of counsel, final submissions were heard on 16 October 2018.
GOODIER v THE EARTHQUAKE COMMISSION [2018] NZHC 2980 [16 November 2018]
[2] At 5.15 pm on 16 October, after all counsel had delivered their closing submissions, Mr Shand for the plaintiffs handed up an amended statement of claim at the close of his reply submissions.
[3] Counsel for the defendants objected to the “last-minute application,” primarily on the grounds that no amended pleading may be filed after the close of pleadings date, without the leave of the Court.
[4] Mr Shand made no application for leave to file the amended statement of claim, and given the lateness of the hour, I treated the handing-up of the amended claim as an oral application for leave. Mr Shand, when asked for the grounds of his “application”, responded that it “tidies up many issues.”
[5] I directed that the defendants file memoranda, with their response to the oral application.
[6] The defendants filed memoranda in opposition to the plaintiffs’ application to file the amended statement of claim and by telephone conference on 2 November 2018, all counsel were in agreement that the application should be dealt with on the papers and no further hearing time was required.
The amendments
[7] The plaintiffs’ amended statement of claim does not show the amendments by bolding or by tracking the changes of deleted paragraphs.
[8] I therefore set out the amendments, from a comparison of the plaintiffs’ original statement of claim with the proposed first amended statement of claim as follows:
(a) Para [5(1)(b)(i)]: “the second defendant” has been changed to read “IAG”.
(b) New para [6], which reads:
6 In the policy the definition of “house” expressly includes:
(1) Driveway of permanent construction that provides direct access to the residential dwelling(s), or any other outbuilding;
(2) Patio, paths and paving of permanent construction, deck, steps, gate or fence, as long as they are on or within the residential boundaries within which the residential dwelling is situated;
(3) Walls including garden and retaining walls.
(c) Deleted paras [8] and [9] and replaced with a new para [9] which reads:
(d) The wording of para [10] has been amended to read:
10 The house comprises/comprised:
(1) A dwelling of timber and weatherboard construction, with a tin and colourbond roof a connected garage (“the dwelling”);
(2) A driveway, paths and pavers (“the external features”)
(e) The details of what loss was caused to the house and land by the landslip have been expanded from 11 items to 34 items. The additional items included are:
(5) Exacerbation of existing cracking in the garage concrete floor slab;
(6) A crack across the junction between the workshop and garage;
(7) Garage floor and foundation subsiding;
(8) Movement of garage concrete foundation slab relative to the house;
(9) Movement of the eastern garage wall in relation to the house;
...
(11) Roof leaks;
(12) Separation of weatherboards on the eastern elevation between the new and existing garage;
(13) Slumping below the gully trap on the eastern elevation between the new and existing garage;
(14) Weatherboards out of level;
(15) Misalignment in the roof and gutter lines above the garage door;
(16) A fall in the lounge floor of 24mm over approximately 3m;
(17) Rotation or bending of the lounge bay window corner post;
(18) Lounge bay window sloping in the same direction as the floor;
(19) Crack at the base of the bay window lining and architrave junction;
(20) Doors that are jamming;
(21) Cracking to internal plasterboard linings;
(22) Cracks in the firebox;
(23) Movement to the timber cross bracing beneath and behind the firebox;
(24) Cracking and separation of pavers;
(25) Movement of pavers adjacent to the support pole at ground level directly below the southwest corner of the lounge;
...
(32) Driveway and walkway collapsed;
(33) Void beneath slab and adjacent to pile;
(34) Pile lean(s).
(f) Paras [12] and [14]–[16] have been deleted.
(g) The wording of paras [20] and [21] from the first statement of claim has been amended but the content is the same.
(h) Paras [26] and [27] have been deleted and replaced with:
(1) To remediate the dwelling on its current site to a condition as similar as possible to when it was new it would cost
$226,095.72 (as set out in the attached schedule).
(2) To remediate the external features on their current site to a condition as similar as possible to when it was new it would cost $440,864.36
(i) In relation to the first cause of action, under s 18 of the EQC Act, the figure the plaintiff seeks against the first defendant has reduced from
$77,091.79 to $76,709.79.
(j) In relation to the second cause of action, under s 19 of the EQC Act, the plaintiffs now seek general damages of $50,000 (as well as interest and costs). The particulars of this pleading have been amended in paras [30]–[40].
(k) In relation to the third cause of action, against IAG for breach of obligations, the particulars in paras [41]–[44] have been amended, by amending the cost to remediate the house and allegations of the amount the second defendant is liable to pay to the plaintiffs. The plaintiffs plead that the second defendant is liable to pay them a further
$369,972.95 to reinstate the house to a condition as similar as possible to when it was new.
Relevant legal principles
[9] There are several rules under the High Court Rules 2016, which govern the amendment of pleadings at various stages prior to and after trial.
[10] The first of those rules is r 7.7, which restricts the steps to be taken after the close of pleadings date. Rule 7.7 provides:
7.7 Steps after close of pleadings date restricted
(1) No statement of defence or amended pleading or affidavit may be filed, and no interlocutory application may be made or step taken, after the close of pleadings date without the leave of a Judge.
(2) Subclause (1) does not apply to –
(a) an application for leave under that subclause; or
(b) a pleading or an affidavit that merely brings up to date the information before the court; or
(c) an application for amendment of a defect or an error under rule 1.9.
[11] Rule 7.77 defines an amended pleading and provides:
7.77 Filing of amended pleading
...
(2) An amended pleading may introduce, as an alternative or otherwise,–
(a) relief in respect of a fresh cause of action, which is not statute barred; or
(b) a fresh ground of defence.
...
[12] After the close of pleadings date, an amended pleading may only be filed with the leave of the Court under r 7.7. However, this does not apply to a pleading that updates information before the Court or an amendment made under r 1.9.
[13] Rule 1.9 governs amendment of pleadings for defects and errors, at any stage of the trial until judgment is sealed:
1.9 Amendment of defects and errors
(1) The court may, before, at, or after the trial of any proceeding, amend any defects and errors in the pleadings or procedure in the proceeding, whether or not there is anything in writing to amend, and whether or not the defect or error is that of the party (if any) applying to amend.
(2) The court may, at any stage of a proceeding, make, either on its own initiative or on the application of a party to the proceedings, any amendments to any pleading or the procedure in the proceeding that are necessary for determining the real controversy between the parties.
(3) All amendments under subclause (1) or (2) may be made with or without costs and on any terms the court thinks just.
(4) This rule is subject to rule 7.7 (which prohibits steps after the close of pleadings date without leave).
[14] The cases identify that the key factors in determining whether leave should be granted are:
(a) an application for leave to permit late amendments to a pleading requires the courts to conduct a balancing exercise between the general concern that parties comply with procedural requirements, and the
particular interest in each case of ensuring the case is justly determined;1
(b) parties should have every opportunity to ensure that the real controversy goes to trial so as to secure the just determination of the proceedings;2 and
(c) relevant factors that the court may take into account in deciding whether to grant leave include the length of delay in amending the pleading and the reasons for it, the risk of prejudice to other parties, and the merits of the proposed amendments.3
[15] In Wright Stephenson & Co Ltd v Copland, the Court held the then-equivalent of r 1.9 was not limited to the mere correction of defects and errors, but should allow all amendments necessary to determine the real controversy, unless satisfied that the applicant was either acting in bad faith, or that the order would cause prejudice that could not be remedied by an award of costs.4
[16] It is necessary for an applicant, in order to obtain leave to take steps after the close of pleadings date, to surmount three “formidable hurdles”: that it is in the interests of justice; it will not significantly prejudice other parties; or cause significant delay.5
[17] In the recent decision of Canterbury Medical Officer of Health v Bond Markets Ltd, Gendall J referred to the three formidable hurdles and found that it was not in the interests of justice to grant leave to the appellant, to amend its notice of appeal.6 That amendment sought that the authority’s decision be overturned, contrary to the appellant’s submissions and original appeal. Gendall J said:7
1 Whakatane District Council v Bay of Plenty Regional Council [2008] NZHC 340; (2008) 19 PRNZ 91 (HC) at [10].
2 Thornton Hall Manufacturing Ltd v Shanton Apparel Ltd [1989] 1 NZLR 234 (HC) at 309.
4 Wright Stephenson & Co Ltd v Copland [1964] NZLR 673 (SC).
5 Elders Pastoral v Marr [1987] NZCA 18; (1987) 2 PRNZ 383 (CA) at 385.
6 Canterbury Medical Officer of Health v Bond Markets Ltd [2018] NZHC 496.
7 Footnotes omitted.
[31] In order to obtain leave to such an amending step, not only after the close of pleadings date but also after what is effectively the close of the trial here, it is necessary for the appellant to “surmount the three formidable hurdles” of showing that doing so would be in the interests of justice and it would not significantly prejudice other parties or cause significant delay. The Court must weigh these constraints against the principle that parties should have every opportunity to ensure that the real controversy between them is determined.
[18] In refusing to grant leave, Gendall J noted that counsel for the appellant had not raised the possibility of a leave application during written submissions or at the hearing and delay would be likely to occur, as the other parties had no real opportunity to present full submissions on the leave application. The leave application was raised after the conclusion of the hearing.
[19] In Ali v Siddique, the English Court of Appeal overturned a decision granting permission to amend the particulars of claim. The English Court of Appeal said:8
[45] ... In considering any application to amend a court is concerned to ensure that the case is dealt with justly and that, so far as practicable, the real issue between the parties can be adjudicated upon. However, the court is also concerned to ensure that a party faced with an amendment is not unfairly prejudiced. If an amendment is sought at any early stage in a claim, it will often be the case that any such prejudice can be adequately compensated in costs. But where an amendment is sought at a very late stage and perhaps, as here, at the trial, the position may be very different. A party faced with an application to make such a late amendment may be placed in great difficulty in giving it adequate consideration, in determining how it affects the case that has been prepared and in assessing whether, for example, it requires a corresponding amendment to its own pleading, further disclosure or fresh evidence or even an adjournment.
[46] For all of these reasons a court will not only consider the prejudice that would be caused to the party seeking a late amendment if it were refused but will also have careful regard to the prejudice that would be caused to the party faced with the amendment if it were allowed. Moreover, relevant factors to consider will include the degree of precision with which the proposed amendment is formulated and any explanation as to why it is being made so late. Indeed it has been emphasised on more than one occasion by this court that a party seeking a late amendment bears a heavy onus to justify it ...
8 Ali v Siddique [2015] EWCA Civ 1258.
The parties’ positions
[20] The plaintiffs seek leave to amend their pleadings, relying on r 1.9, that it is in the interests of justice for the real controversy to be determined in light of the true nature of the dispute between the parties. They submit they are amending discrete aspects of the pleadings, dealing with the new evidence which arose during the trial. There were also contentious damaged elements to the house that were omitted from the original statement of claim and should have been part of the “true issues of the claim” to be dealt with. The plaintiffs say there is no prejudice here, because the issue is whether there is landslip damage or not and all the damage now claimed is in evidence, despite its absence in the first pleading.
[21] IAG opposes leave on the following grounds:
(a) There can be no amended pleading after the close of pleadings date without leave of the Court. No leave had been sought by the plaintiffs. The amended statement of claim was furnished at the closing of the plaintiffs’ oral submissions.
(b) There has been no opportunity to respond to the amendment application properly, without a written application and grounds.
(c) It is a whole new claim. It is not bringing “up to date” information only, under r 7.7(2)(b).
(d) The amended claim was calculated to cause prejudice – ensuring the defendants were unable to “respond to the new matters raised, argue their significance, refer to relevant evidence or lack thereof, and address generally the change in direction.”
[22] EQC also opposes leave on the same grounds as IAG, but distils its opposition on the basis of the three “insurmountable hurdles”:
- (a) injustice, because the ability of the defendants to respond has been prejudiced and the late amendment was a deliberate tactical decision on the part of the plaintiffs;
(b) prejudice, because the amended claim seeks to introduce new elements of damage to the garage and the house, re-plead an abandoned cause of action and substantially increase the quantum; and
(c) delay, because the trial will need to be recommenced.
Analysis
[23] In opening the case for the plaintiffs, Mr Shand claimed that damage had occurred to the Goodiers’ house, as part of the building claim, over and above the four elements pleaded at paragraph [11(3)–(6)] of the plaintiffs’ statement of claim. The additional items of damage included cracking to the firebox; leaking roof; cracks to internal wall linings; sticking doors and windows; and bowing of the bay window post in the dining room. The plaintiffs adduced evidence in respect of the additional items, over and above the pleaded claims, and the defendants cross-examined and called evidence in respect of those items as well.
[24] During the hearing, Mr Shand sought to adduce new evidence, which had not been briefed or pleaded, from Mr Hunt, who visited the Goodiers’ house before his evidence commenced and while Mr Csiba, the plaintiffs’ engineer, was still giving his evidence in re-examination. Mr Hunt took photographs of various aspects of the house, but most importantly, gave evidence about his discovery of a void around the garage pile in the southwest corner, which he said demonstrated that the pile had been undermined and was not in a solid foundation.
[25] Although there was no formal application for leave, I granted leave to the plaintiffs to adduce Mr Hunt’s additional evidence, over the defendants’ objections, on the basis that the defendants had an opportunity to reinspect the property and give such additional evidence as they saw fit.
[26] The defendants took that opportunity and re-briefed the evidence of their engineer, Mr Smith, to deal with Mr Hunt’s allegations, that the southwest garage pile was not in a solid foundation and had been undermined, as well as other matters newly raised in Mr Hunt’s evidence.
[27] In closing, the defendants were highly critical of the plaintiffs’ pleadings, alluding to the additional matters canvassed in the plaintiffs’ opening and the allegations of damage arising through the trial, none of which had been pleaded nor amended prior to the plaintiffs’ closing submissions. Each of the defendants carefully traversed in their closing submissions the additional allegations of damage, which arose either at the commencement of the trial or during it, and which still had not resulted in any amended pleadings.
[28] As noted at paragraph [2], after all counsel had delivered their closing submissions, Mr Shand handed up an amended statement of claim at 5.15 pm on the last day of the hearing of this matter, to “bring the pleadings up to date” with the evidence the Court had heard.
[29] I have set out the parties’ positions and the relevant legal principles above.
[30] I turn, then, to the High Court Rules. The rules make clear that an amended pleading cannot be filed after the close of pleadings date, without the leave of a Judge.9 However, a pleading that “merely brings up to date the information before the court”,10 or an application for leave to file an amended pleading after the close of pleadings date, or an application for amendment of a defect or an error under r 1.9 is not governed by r 7.7(1). Under r 1.9(1), the Court may, after the trial of any proceeding, amend any defects and errors in the pleadings, whether or not there is anything in writing to amend.
[31] Further, under r 1.9(2), the Court may, at any stage of a proceeding, make amendments to any pleading in the proceeding that are necessary for determining the real controversy between the parties. Rule 1.9(4), however, makes this rule subject to
9 High Court Rules 2016, r 7.7(1).
10 Rule 7.7(2)(b).
r 7.7, “which prohibits steps after the close of pleadings date without leave”. The effect of r 1.9(4), however, is negated by r 7.7(2)(c), because an application for amendment of a defect or an error under r 1.9 is exempt from the requirement, that no amended pleading may be filed after the close of pleadings date without the leave of a Judge.
[32] In this case, the new pleading does not amend any error in the pleadings, nor does it seek to amend any defects, as such. It is instead a pleading that purports to principally bring up to date “the information before the Court” as provided in r 7.7(2)(b). The pleading also amends the plaintiffs’ claims for damages, with new estimated costings for remedial work and a claim for general damages only against EQC, in respect of the second cause of action under s 19 of the Earthquake Commission Act 1993 (EQC Act).
[33] The amended pleading falls into three categories for consideration:
(a) Items of damage, which were the subject of evidence-in-chief, cross- examination, and re-examination during the trial.
(b) Claims for remediation of the dwelling and external features “on their current site”, together with relief sought against EQC for further remediation of the dwelling and against IAG for remediation to the dwelling and “external features”.
(c) In relation to the second cause of action, under s 19 of the EQC Act, a claim for general damages of $50,000 (as well as interest and costs only). The relief sought for judgment in the sum of $39,250 has been abandoned.
[34] I turn, then, to consider each of those categories in relation to the High Court Rules and the legal principles from the authorities.
Category 1 – proposed new items of damage
[35] The new proposed items of damage have all been the subject of evidence during the trial and a number of those elements, such as the belated introduction of “lateral movement” of the garage slab and the “garage floor and foundations subsiding” arise as a result of the belated investigation of the house property during the trial. The defendants claim that if these items had been properly pleaded, further particulars could have been sought at an earlier stage and further (or more extensive) evidence called on the issues.
[36] Other items, Mr Raymond submits, do not necessitate an amendment, as the issue is before the Court in relation to the original, more general, pleading of either “floor dislevelment” or “differential settlement of the dwelling’s floors and foundations”. He submits that paragraph [11(32)] “driveway and walkway collapsed” is potentially significant, because it is a departure from the original pleading that there had been an evacuation of land. However, he submits that it is unnecessary to amend, as the substantive issue is before the Court.
[37] I am cognisant of the defendants’ criticism of the plaintiffs that their statement of claim was not amended to align with the evidential allegations during the trial or before final submissions, and the defendants’ strong objection to the amendment on the grounds that it would be unjust, prejudiced, and likely to cause delay.
[38] I have been concerned throughout the trial that the additional evidence, for which I granted leave to adduce, contained allegations and claims that were not pleaded and I indicated to Mr Shand that the pleadings may need to be reviewed. My concern at the time was that if the defendants were prejudiced by the late introduction of new evidence and claims, and needed more time to deal with the evidence, then I was minded to grant such additional time as the defendants needed.
[39] I have considered carefully the defendants’ submissions on the interests of justice in this case and any consequential prejudice to the defendants, in being able to properly defend the plaintiffs’ additional allegations. In striking a balance of the interests of justice to the plaintiffs to have their full controversy before the Court, as opposed to refusing the amendment on the additional items of damage because of
prejudice, I consider that it would be somewhat artificial for the Court to refuse the amendments to the pleadings in respect of the items in category 1. I take the view that these issues are before the Court, largely as a result of the evidence that was adduced during the hearing and will require a final determination.
[40] Unlike the respondents in Canterbury Medical Officer of Health, the defendants have had an opportunity to present submissions on these additional items of damage, which they carefully traversed in their final submissions. Further, I consider the amendments sought here are not as fundamental as the change in position of the appellants in the appeal hearing before Gendall J in that case.
[41] Turning, then, to the High Court Rules, I consider that these amendments sought in category 1 are a combination of a pleading that brings up to date the information before the Court, as r 7.7(2)(b) provides, and in part, amends the plaintiffs’ pleading, to contain the real controversy between the parties, as r 1.9(2) provides.
[42] On a strict reading of both rules 7.7 and 1.9, it appears to me that although they are contradictory and circular, a pleading that updates the information before the Court (r 7.7(2)(b)), and/or contains the real controversy between the parties (r 1.9(2)) comes within the exemption of r 7.7(2), which does not require the leave of the Judge, after the close of pleadings date. The distinction, however, is somewhat academic. A ruling on the proposed amendment of pleadings here inevitably involves a Judge’s decision, in any event.
[43] I note that in r 1.9(2), the Court may make amendments to any pleading on its own initiative, which implies that a Judge inevitably will need to make a ruling on amendments to pleadings after the close of pleadings date.
[44] I have reached the view that it is in the interests of justice that the pleadings here reflect the full controversy between the parties, and the elements of the claims, adduced in evidence during the trial.
[45] There are, however, two further considerations. The first is prejudice, and the second is delay. In granting leave to permit the proposed amendments in the first
category, I do so on the basis that the defendants must have an adequate and proper opportunity to address any of the new items of damage pleaded, either by way of evidence or by further submission. It has been unsatisfactory that the original pleadings did not foreshadow the extent of the detail of damage, which became evident in the plaintiffs’ reply briefs, shortly before trial, or were not amended during the trial, to reflect the claims and the evidence adduced in support of them. I therefore direct that the defendants are to file memoranda, setting out the further time required for either the hearing of further evidence and/or further submissions.
[46] I deal briefly with delay. This matter was set down for 10 days in Whanganui and it became clear, during the hearing, that this was woefully inadequate to deal with the evidence foreshadowed by way of briefs before the trial and extended by the additional evidence during the trial. A further week was scheduled for hearing in Wellington. In total, the hearing of the trial together with submissions has taken 15 days. In itemising the days of hearing, I do not want to underestimate the importance of the additional evidence regarding the southwest pile of the garage corner, as discovered and adduced by Mr Hunt. As a result of his evidence, which was accepted professionally and appropriately by the defendants, the Court was given an opportunity to hear evidence of the actual position, regarding the southwest foundation under the garage. The additional evidence inevitably caused further hearing time.
[47] However, coming as it did during the trial, the defendants had to respond under pressure and did so, re-briefing their principal expert and further witnesses accordingly. I consider, therefore, that delay in this case is not a critical factor. It is more important that the parties have every opportunity to address the evidence properly, and for that reason I extend to the parties a further opportunity to adduce further evidence or make further submissions, as I have outlined above.
Category 2 – Remediation costs and damages
[48] The second category involves amendments to pleadings with adjusted costs of remediation to the dwelling and to “the external features on their current site”. It also includes the amendments to the first cause of action against EQC, under s 18 of the EQC Act, reducing the claim from $77,091.79 to $76,709.79. In relation to the third
cause of action against IAG for breach of obligations, the claim is now a further
$369,972.95 to reinstate the house and the external features of the land, including repairs to the driveway and landscaping costs.
[49] During the trial, when Mr Hunt was giving his evidence, he had revised the plaintiffs’ claim for remedial costs. The revision of costs was substantial and were not the subject of any application to amend the pleading prior to his evidence being given.
[50] The defendants strongly objected to the evidence being adduced, as the defendants were in no position to properly cross-examine Mr Hunt.
[51] I upheld the defendants’ objections that the evidence sought to be introduced by Mr Hunt should not be adduced at that time at the hearing, because of the exigencies of time and the position in which IAG had been placed. IAG considered Mr Hunt’s original costings were reasonable, and was not intending to challenge them. IAG were in no position to defend and undertake any cross-examination on revised costings, just presented.
[52] For those reasons, I adjourned the evidence on damages for a further hearing.
I made the following ruling:11
adjourning the evidence on the revised costings of remediation to a further hearing, following my determination on liability, when all parties can address the appropriate remediation, and address quantum following my liability determination at a separate hearing.
[53] Mr Raymond’s submission that Mr Hunt’s costings were ruled inadmissible is, therefore, not correct. The evidence was not to be adduced at this part of the hearing until liability had been determined.
[54] The proposed amended costings now provide the defendants the detail and the elements of the further relief claimed by the plaintiffs, depending on the outcome of liability. It is appropriate, therefore, that the revised costs are properly pleaded and can be the subject of further evidence and hearing, once liability has been determined.
[55] I therefore grant the amendment of the category 2 pleadings.
Category 3 – s 19 claim for general damages
[56] The amendment in the third category relates to the second cause of action against EQC, which is the plaintiffs’ claim for general damages for distress, arising out of their claim in respect of residential land, including all retaining walls and their support systems within 60 metres of the building. EQC paid the plaintiffs $75,750 in respect of their land claim. In opening the plaintiffs’ case, Mr Shand abandoned the cause of action, accepting that EQC has paid the plaintiffs the maximum it can lawfully pay them for the land damaged, including their retaining walls.
[57] The plaintiffs’ amended pleading purports to reinstate the cause of action, by reframing the cause of action as one claiming relief for distress, mental anguish and inconvenience, abandoning the underlying cause of action for breach of ss 19, 27 and 29 of the EQC Act. The proposed relief is for general damages, interest and costs.
[58] There are two fundamental flaws in the plaintiffs seeking this amendment. The first is that the plaintiffs have abandoned this cause of action at the commencement of the hearing, and the trial has proceeded on that basis. The evidence and the submissions did not address the issues raised under s 19 of the EQC Act. It is now too late for the plaintiffs to purport to reinstate the cause of action, after the trial has finished.
[59] The second flaw is that neither interest nor costs can be obtained as a matter of law, where the underlying cause of action is abandoned. In those circumstances, a judgment cannot be obtained.
[60] In Jefford v Gee, Lord Denning reinforced the importance of judgment being given, before interest can be awarded.12 In that case, the plaintiff took money held in Court in satisfaction of a claim but sought interest. Lord Denning said:13
He gets no interest because there is no judgment. The Act of 1934 only entitles the plaintiff to interest when he gets a judgment.
12 Jefford v Gee [1970] EWCA Civ 8; [1970] 2 QB 130 (CA).
13 At 150.
[61] Kós J in van Limberg v Earthquake Commission held that the Court’s statutory jurisdiction to award interest under s 87 of the Judicature Act 1908 is dependent on the giving of a judgment.14 In van Limberg, no judgment was given (because EQC had paid his claim) but he sought interest, costs and disbursements. Because there was no judgment, no interest or costs were awarded.
[62] Although there does not appear to be any specific authority on the point, the same applies logically to a claim for general damages without a judgment. As the plaintiffs plead, EQC paid $75,750 in land-related payments to “settle” the plaintiffs’ claim. Although it was less than the plaintiffs’ claim, they accepted at the beginning of the trial that EQC was not liable for a greater sum. There is no liability finding in respect of which damages are payable.
[63] Further, there was no evidence directed in support or against of a claim for distress or anxiety. The plaintiffs have abandoned their second cause of action but have not discontinued. However, the reframing of the second cause of action to simply claim general damages, interest and costs cannot be sustained, without a judgment upholding liability against EQC.
[64] The amendment sought in category 3 is neither granted leave nor permitted. I rule that the proposed second cause of action against the first defendant in the first amended statement of claim is disallowed.
[65] The defendants in their submissions have raised a number of matters which, although not specified in this judgment, I have taken into consideration. One of the submissions alleges that the plaintiffs have made a deliberate tactical decision not to amend earlier, causing more prejudice to the defendants. I am not in a position to make a finding on this submission. For reasons which I have canvassed, including my view about any prejudice to the defendants by these late amendments, I consider that any tactical manoeuvring by the plaintiffs – if that is indeed the position – must be met
14 van Limberg v Earthquake Commission [2014] NZHC 502.
by adequate time for the defendants to deal with any prejudice arising. I take this matter no further.
[66] The other matter that I invite the parties to consider is the closing reply submission of Mr Shand, in relation to “the movement and the wetting” in the soils under the pavers around the wooden pole under the lounge. In response to my question as to whether Mr Shand’s submission on the soils beneath the pavers under the lounge is a landslip or a flooding problem, Mr Shand referred me to s 2 of the EQC Act and the definition of “natural landslip”. On reviewing the parties’ submissions, this has not been addressed, apart from Mr Scott, in opening, who referred to those definitions but not in the context raised by Mr Shand.
[67] In giving the parties an opportunity to address any further evidence and/or submissions arising out of the permitted amended pleadings, namely those in category 1 and category 2, I also invite counsel to make any further submissions about the definition of “natural landslip” in the context of the soils below the pavers under the lounge and whether that is captured by the definition of “natural landslip”.
Result
[68] The plaintiffs are permitted to amend their pleadings as contained in the first amended statement of claim, in respect of the additional items of damage (category 1) and the amended costs as pleaded (category 2).
[69] The amendments to the second cause of action against EQC in category 3 are disallowed.
[70] Counsel for the defendants are directed to file memoranda within 10 working days, identifying the further time they may need to hear further evidence and/or present submissions.
[71] The plaintiffs, within a further five working days, shall advise the Court whether they wish to respond and, if so, the time required to do so.
[72] Costs are reserved.
Cull J
Chapman Tripp, Wellington for the First Defendant
DLA Piper New Zealand, Wellington for the Second Defendant
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URL: http://www.nzlii.org/nz/cases/NZHC/2018/2980.html