About Image Limited v Advaro Limited
[2018] NZHC 2749
•24 October 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-2183 [2018] NZHC 2749
BETWEEN ABOUT IMAGE LIMITED AND OTHERS
First to Sixty-Fourth Plaintiffs
AND AND
AND
ADVARO LIMITED Defendant
ADVARO FUNDING LIMITED Counterclaim Plaintiff
JENNIFER DOHERTY AND OTHERS
First to Fifty-Third Counterclaim Defendants
Hearing: 23 October 2018 Appearances:
D M Fraundorfer and T Conder for the Plaintiffs
D McLellan QC and J Adams for the DefendantJudgment:
24 October 2018
JUDGMENT OF JAGOSE J
(Reasons for dismissal of plaintiffs’ informal applications)
This judgment was delivered by me on 24 October 2018 at 1:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.
Registrar/Deputy Registrar
……………………………………
Solicitors:
D Fraundorfer and T Conder, Holland Beckett, Tauranga
D McLellan QC, Barrister, AucklandJ Adams, Barrister, Auckland
P M Hunter, Simpson Western, Auckland
ABOUT IMAGE LIMITED v ADVARO LIMITED [2018] NZHC 2749 [24 October 2018]
[1] The plaintiffs’ evidence has been given at intervals over the past week. More efficiently to use hearing time, expressly with reservations about doing so before the plaintiffs’ case had closed, the defendant stated its case last week. At the close of the plaintiffs’ case yesterday morning, Mr McLellan advised no evidence would be offered by the defendant.
[2] Mr Fraundorfer responded the defendant was bound to call Kerry John McNae, for whom a brief of evidence had been served by the defendant, and to which evidence Mr McLellan had referred in his ‘mini’ opening. That reference was in support of the proposition the defendant was “a finance company that specialised in renting equipment to businesses”. Mr Fraundorfer wished to cross-examine Mr McNae.
[3] Mr Fraundorfer relied on HCR 9.13(2), in respect of which Mr Conder made submissions. The whole of HCR 9.13 provides:
9.13 Briefs not given in evidence
(1) If, by the time that a party opens the party’s case, the brief of another party’s witness has not been given in evidence, the party may, in opening, refer to that brief only with the leave of the trial Judge.
(2)When any part of the evidence contained in a brief is not given in evidence at the trial by the person who signed the brief, any other party to the proceeding may, unless the trial Judge otherwise directs, put that part of the evidence to that person in cross-examination.
[4] Mr Conder argued HCR 9.13(2) commits a party to call any person who served a signed brief to give evidence, if that party referred to the brief in opening or stating its case. This argument proceeded by analogy to HCR 9.5(4), which provides:
A document in the common bundle is automatically received into evidence (subject to the resolution of any objection to admissibility) when a witness refers to it in evidence or when counsel refers to it in submissions (made otherwise than in a closing address).
In other words, the argument (as I understood it) was that Mr McLellan’s reference to a brief caused it to be received into ‘evidence’, entitling any other party to cross- examine that witness.
[5] A brief – distinctly from a document included in the common bundle and referred to by a witness or counsel – becomes evidence “when read by the witness at the trial”.1 This is at least an outworking of s 83 of the Evidence Act 2006, which provides the “ordinary way for a witness to give evidence” is “orally in a courtroom” or by “an affidavit filed in the court or by reading a written statement in a courtroom”.2
HCR 9.7(1) defines a ‘brief’ prospectively, as “in relation to the evidence of a witness to be called by a party, … setting out evidence proposed to be given by that witness”. Although HCR 9.12(1)(a) provides “[a] brief signed by a witness … must … be read by the witness at the trial”, the reference to ‘witness’ indicates the signatory is first to have been called to give evidence;3 it is not requiring every signed brief therefore to be read into evidence. McGechan on Procedure’s commentary observes HCR 9.13(1):4
… preserves the important principle that a witness’ brief is not evidence in the proceeding until given in evidence in accordance with r 9.12. This protects the right of a party not to call the evidence.
[6] HCR 9.13(2) enables cross-examination of a witness on omission of anything in their proposed evidence from the evidence s/he gave, but does not go so far as requiring a purely prospective witness to be called to give evidence. Mr McLellan’s reference to Mr McNae’s brief does not convert that brief into evidence, or Mr McNae into a witness. As Mr McLellan’s reference is not made out in evidence, I disregard
it.5 It is not open to the plaintiffs to compel the defendant to call Mr McNae to give
evidence, for their cross-examination of him.
[7] Alternatively, Mr Fraundorfer sought to reopen the plaintiffs’ case, to call
Mr McNae to give evidence. Mr Fraundorfer explained Mr McNae was a director and senior employee of the defendant. He was directly involved in the drafting of documents and correspondence at issue in the proceeding, and could provide insight
1 HCR 9.12(1)(a) and (b).
2 The ‘ordinary way’ is to be distinguished from alternative ways of giving evidence, as provided at
Part 3, Subpart 5 of the Evidence Act 2006.
3 Compare Evidence Act 2006, s 4, which defines a ‘witness’ as “a person who gives evidence …”.
4 Andrew Beck and others McGechan on Procedure (looseleaf ed, Brookers) at [HR9.13.01].
5 Under s 9 of the Evidence Act 2006, the parties formally agreed to admission of facts, including the defendant “is a finance company … that financed the supply of equipment … to businesses”,
which establishes the same point as Mr McLellan’s reference.
into them. Mr Fraundorfer said he expected to cross-examine Mr McNae on that involvement, and had organised the plaintiffs’ evidence accordingly.6
[8] Section 98(1) of the Evidence Act 2006 prohibits a party from offering further evidence “after closing that party’s case, except with the permission of the Judge”.
Mr Fraundorfer relied on Maranathan Charitable Trust v Cawthray Motors Ltd, in which Muir J noted the grant of permission was “ultimately informed by the justice between the parties”.7 That reflects the Act’s purpose, “to help secure the just determination of proceedings”, including by “promoting fairness to parties and witnesses”, and “avoiding unjustifiable expense and delay”.8
[9] Untrammelled resort to such open-ended discretion, however, risks undermining parties’ responsibilities in case management, including to identify in advance exchange of written statements all the evidence on which they intend to rely in making out their respective cases. Hence this Court repeatedly has endorsed intermediate considerations from Equiticorp Industries Group Ltd (in stat man) v Hawkins:9
(1)The discretion should be exercised sparingly once the cases on both sides have closed and leave should only be given in exceptional circumstances;
(2)Only if the failure to call evidence at the proper time is adequately explained should the discretion be exercised;
(3)The justice of the case must require the admission of the additional evidence; …
(4)Leave will be refused if the witness (evidence) would have been available had due diligence been exercised;
(5) If the party is taken by surprise, leave will be more readily granted;
and
(6)The distinction between a failure to tender evidence and an election not to, can be important.
6 The plaintiffs’ opening also made substantial reference to Mr McNae’s anticipated evidence, although always together with the parties’ agreed statement of facts and/or documents in the common bundle. Leave was not sought under HCR 9.13(1) for those references to the brief, which I also disregard.
7 Maranathan Charitable Trust v Cawthray Motors Ltd [2016] NZHC 1069 at [28].
8 Evidence Act 2006, s 6(c) and (e).
9 Equiticorp Industries Group Ltd (in stat man) v Hawkins [1996] 2 NZLR 82 (HC) at 85 followed most recently in Philip Moore & Co Ltd v Surridge [2018] NZHC 172 at [14].
There also are the criteria earlier enumerated by Tipping J in Savill v Chase Holdings
(Wellington) Ltd:10
(1) The Court should consider whether the new evidence could with reasonable diligence have been adduced at the trial or whether the party seeking to adduce the further evidence has shown on a reasonable basis that he did not earlier appreciate its significance …
(2)The Court should consider whether the new evidence is such as will either (a) be conclusive of the case; or (b) at least be likely to have a substantial bearing on a central issue.
(3)The Court should consider from the nature of the new evidence sought to be adduced how credible and reliable it is likely to be.
[10] I might allow the present circumstances are ‘exceptional’, at least in the sense of being ‘other than usual’. Usually, a party will call as witnesses the people for whom it has served written statements of proposed evidence. However, that assumes the party served all and only the evidence on which it required to rely to make out its case. The assumption does not allow for the parties’ later agreement on facts for admission under s 9 of the Evidence Act 2006, or on the contents of the common bundle, which may render proposed evidence redundant.
[11] The plaintiffs’ failure to call evidence of the nature they expect to secure from Mr McNae’s cross-examination is not adequately explained. Here, the plaintiffs could not have decided to rely on Mr McNae’s cross-examination until after they received the defendant’s written statements served in response to their own written statements. It was a strategic choice not first to address whatever part of their evidence was intended to be met by Mr McNae’s cross-examination. Further, if the plaintiffs were now to call Mr McNae, he would be their witness. They could not cross-examine him, but only lead his evidence.
[12] More significantly, the agreed list of common issues for this ‘stage one trial’ is very substantially founded on the plaintiffs’ contention of a “tripartite agreement” and its express and implied terms, expressly to be construed from the pleaded “factual matrix”. Contract construction is an objective exercise to determine:11
10 Savill v Chase Holdings (Wellington) Ltd [1989] 1 NZLR 257 (HC) at 291-292 followed in Philip
Moore & Co Ltd Surridge, above n 9, at [15].
11 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444 at [19].
… what a reasonable and properly informed third party would consider the parties intended the words of their contract to mean[,] … aware of the commercial or other context in which the contract was made and of all the facts and circumstances known to and likely to be operating on the parties’ minds.
That is, ‘known to and likely to have been operating on all parties’ minds’.12
[13] From that perspective, nothing only Mr McNae could say would further the justice of the case. If anticipated evidence known only to Mr McNae, it is not part of the factual matrix against which to construe the contract; if anticipated evidence known also to Mr McNae, the plaintiffs’ failure to call it as evidence is inexplicable. Mr McNae’s evidence, whatever it may be, cannot carry the requisite weight to permit the plaintiffs to reopen their case.
[14] I therefore refused the plaintiffs’ informal application(s) to require Mr McNae for cross-examination, or to re-open their case to call his evidence.
—Jagose J
12 Firm PI 1 Ltd v Zurich Australian Insurance [2014] NZSC 147, [2015] 1 NZLR 432 at [66].
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