Evans v IAG New Zealand Limited
[2020] NZHC 1466
•26 June 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2019-409-705
[2020] NZHC 1466
BETWEEN PAUL FREDERICK WILLIAM EVANS and JOY ELIZABETH EVANS
Plaintiffs
AND
IAG NEW ZEALAND LIMITED
First Defendant
INTERNATIONAL STRATEGIC DEVELOPMENT NEW ZEALAND LIMITED
Second Defendant
QBE INSURANCE (AUSTRALIA) LIMITED
Third Defendant
On the papers: Counsel:
C R Johnstone for Plaintiffs
M Ring QC and P M Smith for First Defendant D H McLellan QC for Third Defendant
J McGuigan as amicus curiae
Judgment:
26 June 2020
JUDGMENT (NO. 2) OF CHURCHMAN J
(Recall application)
[1] Counsel for IAG New Zealand Limited (IAG) has applied for a recall of the judgment in this matter dated 12 June 2020.1 It is asserted that the judgment contains material errors in comments relating to the decision in Bruce v IAG New Zealand Limited.2 The errors are said to be in [62]-[66] of the decision.
1 Evans v IAG New Zealand Ltd [2020] NZHC 1326.
2 Bruce v IAG New Zealand Limited [2018] NZHC 3444.
EVANS & ANOR v IAG NEW ZEALAND LIMITED & ORS [2020] NZHC 1466 [26 June 2020]
The law
[2] Recalling a judgment is governed by r 11.9 of the High Court Rules 2016 (HCR). The Court has an unfettered discretion provided it is exercised before a formal record of the judgment is drawn up and sealed.
[3] It is normal that a party seeking recall should first confer with the other parties and endeavour to obtain their consent.3 It is not clear whether the applicant had done this as it is not a topic referred to in the memorandum of counsel dated 17 June 2020.
[4] I directed that the Registrar contact the other parties involved in the hearing and extend an opportunity for them to inform the Court on the application. All have now filed memoranda.
[5] Counsel for the plaintiffs, in a memorandum dated 24 June 2020, submitted that the plaintiffs accepted that the wording of the policy in Bruce was materially different to their policy. He submitted that the contents of [64]-[66] of the Court’s judgment in this matter fairly recorded the exchange between the Bench and counsel; did not accept the asserted possibilities of misinterpretation or re-interpretation and suggested that the two headings featuring above [62] of the judgment could be corrected as a typographical error under r 11.10 of the High Court Rules 2016.
[6] Ms McGuigan, the amicus, noted the submissions made on behalf of the plaintiffs and did not wish to add anything.
[7] Counsel for the third defendant, in a memorandum dated 25 June 2020, opposed the application for recall. Counsel did not agree that there were any plain mistakes in the judgment and submitted that [62]-[66] of the decision were in accordance with counsel’s recollection. It was submitted that the paragraphs complained of did not make any finding in respect of the Bruce case, nor did they make any pronouncement as to the significance of that decision in relation to the present case.
3 Y v Foulkes [2014] NZCA 396 at [34].
[8] Counsel for IAG filed a brief memorandum in reply on 25 June 2020. It simply repeated points made in the original application.
[9] Notwithstanding the unfettered discretion of the Court, the cases make it clear that recall of a judgment is a serious step and that, other than in relation to correction of accidental slips and omissions, the Court’s discretion is to be exercised in accordance with the principles that have been developed in the caselaw.
[10]The leading statement of those principles remains the decision of Wild CJ in
Horowhenua County v Nash (No. 2).4 In that case, Wild CJ said:5
Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled – first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.
[11] The Court of Appeal has confirmed that other than in respect of accidental slips or omissions, the criteria set out by Wild CJ in Horowhenua County v Nash (No. 2) will be applied strictly.6
[12] The application for recall does not assert that either of the first two grounds identified by Wild CJ are relied on, and the issue is therefore whether, for some other very special reason, justice requires that the judgment be recalled.
[13] The Court of Appeal in Unison Networks Limited v The Commerce Commission considered in some detail the meaning of the words “very special reason justice requires that a judgment be recalled”.7 The Court referred to the decision in Brake v Boote.8 In that case, the Court forgot to consider the question of interest for part of a period. Interest had been applied for and the Court simply omitted to address
4 Horowhenua County v Nash (No. 2) [1968] NZLR 632.
5 At 633.
6 Erwood v Maxted [2010] NZCA 93.
7 Unison Networks Limited v The Commerce Commission [2007] NZCA 49.
8 Brake v Boote (1991) 4 PRNZ 86 (HC).
or award it in relation to one of the relevant periods. The Court of Appeal in Unison
confirmed that this was a “very special reason” for recalling the judgment.
[14] The Court also considered Works Civil Construction Ltd v Does Not Compute Corporation Ltd.9 In that case, the Judge overlooked the fact that the plaintiff had succeeded on the first of two causes of action and only gave judgment on the second cause of action which the plaintiff had lost. The Court of Appeal in Unison noted that this meant that the orders issued had not reflected the Judge’s findings and confirmed that it was a “very special reason”.
[15] In Matua Finance Ltd v Bank of New Zealand,10 the Judge had overlooked the fact that the plaintiff had applied for and been granted leave to amend the orders sought. Orders had been made in terms of the original application. Again, the Court of Appeal in Unison considered that this was rightly regarded as “a very special reason”.
[16] The Court of Appeal also distinguished between the situation where a Judge had failed to address their mind to a matter (which may be a ground for recall) from the situation where the Court had simply made an error, which was more properly dealt with by way of appeal.11
[17] The Court of Appeal in Unison also referred approvingly to the approach taken by the Court of Appeal of England and Wales in Stewart v Engel,12 that the jurisdiction to recall is to be exercised cautiously and sparingly.
[18] The Court of Appeal in Unison also set out, at [32], a passage from Re Blenheim Leisure (Restaurants) Ltd No. 3 which read:13
[A] plain mistake on the part of the Court; a failure of the parties to draw to the Court’s attention to a fact or point of law that was plainly relevant; or
9 Works Civil Construction Ltd v Does Not Compute Corporation Ltd HC WN CP 46/92, 19 November 1992.
10 Matua Finance Ltd v Bank of New Zealand HC AK CP 490/94, 4 August 1995.
11 See the Court of Appeal in Unison’s discussion of the judgment in Hobson v Harding CA 50/95, 30 June 1997 at [28] and also its comments at [40].
12 Stewart v Engel [2000] 1 WLR 2268 at 2274, referred to Unison at [31].
13 Re Blenheim Leisure (Restaurants) Ltd No. 3 The Times 9 November 1999 as referred to in Stewart v Engel, above n 12, at 2274.
discovery of new facts subsequent to the judgment being given. Another good reason was if the applicant could argue that he was taken by surprise by a particular application from which the Court ruled adversely to him and that he did not have a fair opportunity to consider.
[19] Any alleged error upon which an application for recall is based must be a material error. In Unison, the Court said:14
While a decision may be recalled where a material issue properly put before the Court is not addressed, excluding a slip or minor error, the cases in which justice will require a recall on this basis are likely to be rare.
[20] The Court went on to say, specifically in relation to the second of the criteria described by Wild CJ in Horowhenua County that:15
We envisage that the relevant statutory provision would be one central to the disposition of the case.
[21] From these various comments, I discern that, in order to justify a recall, an error or mistake on the part of the Judge must be a material one and one which is central to the disposition of the case.
[22] It is therefore necessary to examine the mistakes alleged by IAG against these criteria.
IAG’s grounds
[23]IAG relies on two grounds in support of the recall application:
·Paragraphs [62]-[66] of the Judgment contain plain mistakes, in that they misstate the relevant context and content of the Bruce16 judgment and the submissions of IAG’s counsel in relation to it – in particular that the Bruce judgment could be relevant to the interpretation issue as to whether a policy obligation just “to pay” includes an obligation to pay the cost of remedying defective repair work.
·In the context of a judgment stated as intended to try and provide some guidance to the Canterbury Earthquakes Insurance Tribunal, if left uncorrected the Judgment is liable to mislead parties and the Tribunal that the Bruce judgment could be relevant to whether an insurer’s subsequent claims handling processes inform the interpretation exercise … above.
14 Above n 7, at [34].
15 At [35].
[24] The memorandum of counsel alleges that the alleged errors are material “because of the context”. The context was said to be:
·The Canterbury Earthquakes Insurance Tribunal had referred a question of law to this Court pursuant to the Canterbury Earthquakes Insurance Tribunal Act 2019, s 53, as to whether, as a matter of proper interpretation of the policy, an insurer’s bare obligation “to pay” the cost of repairing the home to the policy standard, as and when incurred by the insured, included an obligation to pay to remedy defective repair work.
·A preliminary issue was raised in this Court about the relevance of subsequent conduct, and in particular, the insurer’s subsequent claims handling processes, as a legitimate aid to the interpretation exercise.
·The judgment dealt with this preliminary issue, by ruling that:
(1)it was capable of being relevant;
(2)as a result, whether it is relevant will depend on the facts of each case – which the Tribunal would need to determine. The overall effect was to forestall any hearing to determine the referred question of law. But the Court did attempt to try and provide some guidance to the Tribunal by answering the referred question with six guidelines, (a)-(f).
·As a result, the judgment will inevitably have considerable significance in the Tribunal, to both parties and the Tribunal itself; and so it is essential that it does not contain material errors that, if remain uncorrected, are likely to mislead those who may rely on it.
[25] Counsel’s memorandum of submissions notes that the Bruce decision was not referred to in any of the written submissions filed and served before the hearing and was first mentioned by the amicus in oral submissions. That is correct, although nothing turns on this point.
[26] Counsel for IAG was fully familiar with the decision, able to address it in his oral submissions, did not claim to have been taken by surprise or seek leave to file further written submissions in response to the submissions made by the amicus.
[27] Counsel alleges that the Court accepted the “potentiality” of IAG allegedly taking inconsistent positions about the “to pay” obligation by saying that the claims handling processes in each case were a question of fact that could not be determined in the case-stated process. However, these submissions overlook the fact that the Court at [64] specifically accepted counsel for IAG’s submission that:
… because the Bruce decision does not address the question of whether the repair obligation arose at the point of entry into the insurance contract or at some subsequent time, it is of no assistance to the Court in this case.
[28] It is also difficult to see how any reader of the Court’s decision in this case might be misled about the significance of the Bruce decision when, at [63] of the Court’s decision, the Court makes it clear that the judgment in Bruce “does not articulate the basis” upon which what was referred to as the concession in that case was made. That paragraph also notes the submission of counsel for IAG that the case was fact-specific and:
…entirely consistent with the alternative proposition that the Evans are also running that at the time of the handling of the claim, it was handled in such a way that IAG assumed an obligation.
[29]That is a verbatim quote from the transcript of counsel’s verbal submissions.
[30] However, the most significant point is that, in the memorandum in support of the recall application, counsel specifically acknowledge at [5] that:
… the Bruce judgment, was irrelevant to any issue in this case, except by way of contrasting the effect of materially different policy provisions; and so whether or not there were material differences between the claims handling processes in each case was also irrelevant.
[31] Counsel is right that the Bruce judgment was held by this Court to be irrelevant to this case. It had been referred to by the amicus and needed to be addressed in the decision. The discussion by the Court at [62]-[66] of the Bruce case, did not produce a finding that was “material” to the decision. To the contrary, it explained why Bruce was not relevant. It therefore also cannot be said that the comments in those paragraphs were “central to the disposition of the case”.
[32] In his memorandum, counsel for IAG places considerable emphasis on the fact that the terms of the policy in Bruce were materially different to those in the present case and says that the policy expressly gave IAG an election whether to repair the home itself or let the insured carry out the repair itself and then pay the costs of repair as and when the insured incurred them. He submits that in this case, the policy did not give IAG any such decision. These submissions ignore the Court’s findings at
[44] of the judgment where the Court specifically concluded that there was an
argument, because of the facts set out in [42] and [43], that this was not just a “to pay” policy. That is why the Court, at [68](e) concluded that the issue of whether the policy was merely a “to pay” one or one involving liability on IAG for the cost to remedy a defective repair, will need to be resolved by the Tribunal.
[33] In the judgment that the applicant seeks to recall, the Court repeatedly stated that the decision in Bruce does not resolve any issue of liability in this case.17
Conclusion
[34] If the Court has made an error, then that is a matter that is properly dealt with by way of appeal. It does not meet the prescriptive tests that the Courts have laid down for what should be the rare remedy of recall. The Court’s observations at [62]-[66], even if wrong, were not central to the disposition of the case. Nothing that the Court said about Bruce creates an estoppel for IAG, nor stops them from advancing in any other proceedings, an argument that the policy in that case was not identical to the policy in the present case, or that the facts in that case are distinguishable.
[35] Neither did the Court make any finding about the effect of the claims handling process in Bruce that would prejudice IAG. The Court emphasised in [66] that whether there were material differences in the claims handling process as between the Bruce and Evans’ cases, was a question of fact that was incapable of being resolved by the Court on a case-stated process.
[36]Accordingly, for these reasons, the application for recall is declined.
[37] HCR 11.10 permits the Court to correct a clerical mistake, accidental slip or omission. The heading “Positions of the parties” and subheading “Position of QBE” that appear immediately prior to [62] of the judgment are an error. They are deleted pursuant to HCR 11.10. The rest of the decision remains unaltered.
17 See [28], [64] and [66].
[38]I direct the Registrar to distribute fresh copies of the decision to counsel.
Churchman J
Solicitors:
Cuningham Taylor, Christchurch Duncan Cotterill, Christchurch
cc:C R Johnstone, Barrister, Christchurch D H McLellan QC, Auckland
J McGuigan, Barrister, Christchurch
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