Easton v Larsen - [2013] NZHC 2859

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV 2009-454-549 [2013] NZHC 2859

BETWEEN IAN CHARLES EASTON First Plaintiff

EASTON AGRICULTURE LIMITED Second Plaintiff

ANDALAN McKENZIE LARSEN Defendant

Hearing: 29 October 2013 (Heard at Wellington)

Counsel: I W Thorpe for Plaintiff
S M Hunter with A T B Joseph for Defendant

Judgment: 29 October 2013

JUDGMENT OF THE HON JUSTICE KÓS (Amendment, adjournment and costs)

[1] On the first morning of trial, the first plaintiff sought leave to amend his statement of claim, increasing quantum exponentially. After hearing from Mr Thorpe in support of the application, and Mr Hunter in opposition, I declined the application to amend, with reasons to follow. After taking instructions, Mr Thorpe then sought adjournment of the trial fixture to enable application to amend to be renewed at a later date. That application I also declined. The plaintiffs then elected to discontinue the proceeding. My reasons for declining both applications, and costs order, follow.

Background

[2] This proceeding was filed in 2009. Until 22 October 2013 it was a claim avowedly brought by two plaintiffs, Ian Charles Easton, and Easton Agriculture

EASTON v LARSEN [2013] NZHC 2859 [29 October 2013]

Limited (a company owned by the plaintiff and his family), against the defendant accountant, Mr Larsen. There were two causes of action. First, both plaintiffs claimed against Mr Larsen on the basis of professional negligence. Secondly, Mr Easton alone claimed against Mr Larsen for breach of fiduciary duty and breach of trust in respect of his responsibilities as a trustee of the Moutoa Trust, settled by Mr Easton’s parents in 1997.

[3] But in opening submissions, filed and served by the plaintiffs a week ago on

22 October 2013, the first cause of action in negligence was formally abandoned. Today, Mr Thorpe explained that expert analysis established that the alleged negligence had caused the plaintiffs no loss at all.

[4] As a result of that abandonment the second plaintiff, Easton Agriculture Limited ceased effectively to be a plaintiff in this proceeding. The remaining, second cause of action is advanced by the first plaintiff, Mr Easton, alone.

Application for amendment

[5] An amended statement of claim was filed in April 2013. In June 2013 the plaintiffs received a brief of evidence from their expert accountant witness, Ms Kelly. It is apparent on the face of this document that her computation of loss did not match the claim pleaded in April. Yet only in opening submissions filed and served on 22 October 2013, one week before trial, did the first plaintiff signal a wish to amend further:

There has been no amendment of the first amended statement of claim. To the extent formally a [sic] necessary the plaintiffs will respectfully apply for an order amending the claim.

The exact terms of the proposed amendment were not the subject of notification prior to trial, or formal application.

[6] The prayer for relief in the second cause of action is as follows:

(a) Special damages:

(i) Additional and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] NZHC 2859
Decision Date: 29 October 2013

CaseChat Overview and Summary

In the High Court of New Zealand, Easton v Larsen was heard by the Hon Justice Kós. The plaintiffs, Ian Charles Easton and Easton Agriculture Limited, filed a claim against the defendant, Andalan McKenzie Larsen, an accountant, alleging professional negligence and breach of fiduciary duty. The plaintiffs sought damages for losses they claimed were caused by the defendant's actions. The defendant opposed the plaintiffs' attempts to amend their statement of claim and sought an adjournment to allow for the amendment, which was also opposed by the defendant.

The court found that the plaintiffs' application to amend their statement of claim was untimely and prejudicial to the defendant. The court also found that the plaintiffs' application for adjournment was not supported by any of the grounds for adjournment at trial. The plaintiffs ultimately chose to discontinue the proceedings, and the court ordered costs to be paid by the plaintiffs to the defendant.

This case highlights the importance of properly defining the issues in a proceeding through pleadings, and the consequences of failing to do so. The court found that the plaintiffs' failure to properly plead their case resulted in prejudice to the defendant, and the plaintiffs' attempts to amend their statement of claim and seek an adjournment were denied. The case also serves as a reminder that parties must be diligent and efficient in bringing their cases to trial, and that the interests of all litigants must be considered when deciding whether to grant an adjournment.

Orders