Cassels v Tobeck

[2021] NZHC 265

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-700

[2021] NZHC 265

IN THE MATTER

of interference with economic interests and conversion

BETWEEN AND

AND

AND AND

IAN BRACKEN CASSELS

First Plaintiff

THE WELLINGTON COMPANY LIMITED

Second Plaintiff

CONQUEROR NEW ZEALAND LIMITED
Third Plaintiff

TELTOWER LIMITED
Fourth Plaintiff

PIRM LIMITED
Fifth Plaintiff

AND

WAYNE COLIN TOBECK

First Defendant

continued…..2

Hearing:	16 February 2021
Appearances:	R Fowler QC and M R C Wolff for the Plaintiffs S Campbell and J Stringer for the Defendants
Judgment:	24 February 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 24 February 2021 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 24 February 2021

CASSELS v TOBECK [2021] NZHC 265 [24 February 2021]

BETWEEN AND

AND

AND

SIMON GRANT ROLLO

Second Defendant

ORTEGO LIMITED
Third Defendant

CORE CIVIL SOLUTIONS NZ LIMITED
Fourth Defendant

MORATH NZ LIMITED

Fifth Defendant

[1]        The defendants have applied for further and better particulars of the plaintiffs’ amended statement of claim dated 29 September 2020.

[2]        A schedule of particulars was annexed to the application and that schedule runs to just over 90 pages. Discovery has not been completed.

Summary of claim

[3]        At its most basic, the plaintiffs’ claim arises from a breakdown in the commercial relationship between the parties. The plaintiffs say the defendants had been responsible for managing businesses or developing property for them in Christchurch, including establishing information systems and project management. The plaintiffs say that upon the business relationship breaking down, the defendants deleted records relating to the plaintiffs, giving rise to a claim in conversion in respect of the missing information. This is the first cause of action.

[4]        The second cause of action is a claim that the defendants embarked on a course of action deliberately intended to undermine the plaintiffs’ economic interests and/or their contractual relationships. Broadly speaking, the plaintiffs claim the defendants did so through maligning the plaintiffs with third parties or interfering with the plaintiffs’ completion of the Christchurch development project by communicating with the plaintiffs’ contractors. The conduct pleaded is said to give rise to a claim in tort for interference with business relationships.

Substance of pleading criticisms

[5]        There are five plaintiffs named in the proceeding and five defendants. In the two causes of action pleaded, relief is sought by all plaintiffs against all defendants.

[6]        The defendants say it is impermissible for the plaintiffs to be pooled and to in effect advance their claims as one plaintiff. The defendants say in order for the plaintiffs to maintain their conversion pleading, it must be possible for the plaintiffs to identify the individual or entity that owned the particular item of property said to have been converted and, if jointly owned, then such can be pleaded. In short, a conversion must identify the owner of the property said to have been converted.

[7]        In respect of the economic tort claim, the defendants say the plaintiffs must be able to identify the contract allegedly interfered with, and which plaintiff had the benefit of that contract and, similarly, the owner of the economic interest said to have been adversely affected and what that interest was.

[8]        As to the plaintiffs suing all defendants collectively, Mr Campbell, counsel for the defendant, said that if the plaintiffs wish to rely on r 4.3(4) of the High Court Rules 2016 because they are in doubt as to whom they are entitled to claim against, then reliance on the rule should have been pleaded.

[9]        Accordingly, when the application was boiled down to its key documents, the above points, which have some merit, emerged.

[10]      Mr Fowler QC, counsel recently instructed for the plaintiffs (and who was not responsible for the statement of claim in issue), confirmed the plaintiffs intended to replead, but that they would do so after discovery.

[11]      Mr   Fowler   submitted   the   plaintiffs   were   prepared   to   embark   on     a paragraph-by paragraph response to the defendants’ application  for  particulars. Mr Fowler’s practical point was that once the plaintiffs acknowledged the need to replead, that some paragraphs required further particularisation and, more importantly, that the structure of the claim and the identity of the plaintiffs pursuing claims would be reviewed then the present application for particulars became redundant.

[12]      Given the nature of the plaintiffs’ claims, Mr Fowler submitted this was a case when particulars should follow discovery.

[13]      Mr Campbell referred to McGechan on Procedure which states: “Logically, particulars should ordinarily be supplied before discovery of documents, as particulars define the questions at issue in the proceedings, and thus the scope of discovery.”1

[14]      Mr Fowler referred to a recognised exception to that general rule, which is also referred to in McGechan.2 In Pickard v Ambrose,3 Associate Judge Gendall in 2008 (as he then was) referred to a passage in McGechan which is still in the commentary:

However, the general rule gives way to cases where the party seeking particulars knows that the party from whom particulars are sought does not have them, and the Court considers the former is not genuinely embarrassed by the lack of particulars, or that the particulars sought were within the knowledge of the requesting party.

[15]      In those situations, the Court can make an order that the particulars not be provided or defer the provision of particulars until after the provision of discovery.

[16]Kós J (as he then was), in Ayers v LexisNexis New Zealand Ltd, stated:4

Particulars lie in a sometimes uncomfortable no-man’s land between material or essential facts (which must be pleaded and traversed) and evidence (which must not). As Drummond J put it in Queensland v Pioneer Concrete (Qld) Pty Limited:

a pleading must contain only a statement in summary form of the material facts, but not the evidence by which those facts are to be proved, while the primary function of particulars is to ensure that effect is given to ‘the overriding principle that the litigation between the parties, and particularly the trial, should be conducted fairly, openly and without surprises and incidentally to reduce costs’.

1      Andrew Beck and others (eds) McGechan on Procedure (online ed, Thomson Reuters) at [HR5.21.05].

2      Beck, above n [1], at [HR5.21.05].

3      Pickard v Ambrose, HC Wellington CIV-2003-091-143, 14 April 2008 at [29], citing Beck and others above n 1, at [HR185.06].

4      Ayers v LexisNexis New Zealand Ltd [2012] NZHC 3055, (2012) 21 PRNZ 313 (footnotes omitted).

[17]      In considering whether a party is likely to be taken by surprise, the court is entitled to have regard to whether the particulars sought are within the knowledge or control of the requesting party.5

[18]      There is merit in Mr Campbell’s submission that some of the particulars sought by the defendants, rather than being within the defendants’ knowledge, in fact lie within the plaintiffs’ knowledge.

[19]      That said, I saw little point in requiring the plaintiffs to replead to address matters they should be able to particularise from their own knowledge, only to then after discovery replead those areas for which they required discovery. It is more efficient to complete the discovery exercise and then have a further amended statement of claim filed with the benefit of discovery. The plaintiffs could not deflect the defendants’ criticisms of such pleading by saying discovery was required.

[20]      With Mr Fowler being instructed, he indicated an intent to revisit the structure of the pleading more generally as well as to address the issues of substance raised by the defendants. With the plaintiffs acknowledging that exercise needed to occur, conducting at this time a point-by-point review of the particulars sought by the defendants, was likely to become redundant.

[21]      Accordingly,  the outcome of the hearing was  that  the plaintiffs recognised  a need to replead, but sought the completion of discovery first.

[22]      Mr Campbell advised there had already been some arguments about the scope of tailored discovery. In order to permit discovery to move forward, it was agreed there would be an order for general discovery with the parties to exchange lists of documents within three months of the release of this judgment and that inspection would be completed within a further three months.

[23]      Those lengthy timeframes were allowed because of the volume of material known to exist. It was agreed the plaintiffs will then replead within a further month. Directions in terms of paras [22] and [23] are made accordingly.

5      Beck, above n 1, at [HR5.21.05].

[24]      Counsel are to consider whether a process should be agreed by which the defendants will allow an independent forensic review of their computer equipment. No directions in that regard were required, but I reserve leave for either party to seek a telephone conference to discuss that or any other issues that arise.

[25]Two further points require brief comment.

[26]      Firstly, the application for particulars referred to an amended statement of claim. The defendants considered the further initial disclosure given by the plaintiffs at the time of the amended claim. Counsel pragmatically recognised the parties moving to a discovery phase overtook the need for initial disclosure. No orders are made in respect of that part of the application.

[27]      Secondly, the defendants sought costs on an application they brought to regularise aspects of the amended statement of claim. Two issues arose. The first was that the amended statement of claim added a plaintiff without there first being an order under r 4.56. Mr Fowler noted it was the defendants who raised the need for the new plaintiff to be added with the plaintiffs agreeing to that suggestion, hence the amended pleading.

[28]      McGechan records that if there is agreement to add a party, then such can be achieved by filing a consent memorandum.6 While the plaintiffs should have sought such order, it was equally not a matter that required a formal application.

[29]      The second issue was that the amended statement of claim introduced a new cause of action alleging interference with business relations and that claim was based on events that occurred between the original claim and the current claim. This meant the addition of the new cause of action required leave under r 7.77(4). The defendants’ application recorded that if such leave was sought, it would not be opposed. Again, this is a matter that did not require an application given leave was not going to be contested. In those circumstances, there is no order as to costs in respect of those parts of the application.

6      Beck and others, above n 1, at [HR4.56.02], citing Smith v Noble Investments Ltd  [2017] NZHC 477.

[30]      The formal fate of the application for further and better particulars is that it is dismissed, but on the basis that the plaintiffs recognise an amendment to their pleadings is required but with the caveat they say the application for particulars was premature and should have awaited the completion of discovery.

[31]      The above order dismissing the application for particulars is on the basis that, should the defendants consider the amended pleading to come in later this year remains deficient then they may raise at that time such further challenge to the pleading as they think fit.

[32]      The defendants are to plead to the amended claim within the time provided by the rules. Plaintiffs’ counsel is to seek a telephone conference once the defence to the amended claim is received.

Results

[33]      The defendants’ application for further and better particulars is dismissed on the basis set out at [30] above.

[34]      I reserve leave for either party to seek a telephone conference to discuss whether a process should be agreed by which the defendants will allow an independent forensic review of their computer equipment, or any other issues that arise. Costs on the application for particulars is reserved, otherwise there is no order for costs on the balance of the application.

Costs

[35]Costs in relation to the application for particulars are reserved.

Associate Judge Lester

Solicitors:

Wynn Williams, Christchurch Morrison Kent, Wellington

Copy to counsel:
R Fowler QC, Barrister, Wellington