Hamilton City Council v Green HC Hamilton Ap24/01

[2001] NZHC 682

IN THE HIGH COURT OF NEW ZEALAND
HAMILTON REGISTRY AP24/01

BETWEEN: HAMILTON CITY COUNCIL
Appellant

AND: R.M. GREEN and C.A.M. GREEN
Respondents

COUNSEL: D.J. Taylor for Appellant
K.E. O’Rourke for Respondents

JUDGMENT: 27 July 2001

JUDGMENT OF HAMMOND J

Solicitors:
Swarbrick Dixon, Hamilton
Phillips Fox, Wellington

INTRODUCTION

[1] This is an appeal against a judgment in a civil proceeding in the District Court at Hamilton.

[2] The only issue I have presently to determine is a preliminary one. It raises yet again the vexed question of whether proceedings should be remitted to the District Court for rehearing when the tapes of evidence from the District Court hearing have been inadvertently erased, thereby providing an incomplete record of the proceedings in the Court below.

BACKGROUND

[3] Mr and Mrs Green sued the Hamilton City Council for property losses and general damages that they suffered in a flood which inundated their property at Hamilton on 20 April 1996. They raised three causes of action: the doctrine generally referred to as that of Rylands v Fletcher; nuisance; and negligence. The claim in nuisance was abandoned. The trial Judge was therefore asked to determine only the Rylands v Fletcher and negligence causes of action.

[4] On the Rylands v Fletcher pleading, the Greens’ case was that the City Council was collecting and conveying storm water from a large urban area and channelling it down a heavily modified existing water course. That was said to be a non-natural use of the course of that stream. The stream was wholly on land owned by the City Council and the water escaped onto the Greens’ land, causing the damage complained of. No act of God, and nothing the Greens did, caused or contributed to this escape.

[5] The basis of the negligence claim, as Willy DCJ noted, was “somewhat vague”, but really came down - if there was a legal duty - to claims of an inadequate stopbank and a failure to address the problems which had been created by a railway culvert.

[6] In the result, the Judge found for Mr & Mrs Green on both causes of action.

[7] On the negligence cause of action, the Judge held that the City Council “knew that the plaintiff’s property was at risk from flooding and did not take the steps necessary to prevent it”. He said the issue then arising was whether the Council had a legal duty to take these steps. The Judge distinguished Brown v Heathcote County Council [1987] 1 NZLR 720 (PC). He held that Council was “the expert” in drainage matters; it knew of the flooding risk from the early 1970’s and had recognised in its own engineer’s reports that something needed to be done about it; it had embarked on an extensive works programme which (if completed) would have prevented the flooding. However, that programme was deficient in two respects: first, a stop bank was not high enough to prevent a five year flood; and second, certain work on a railway culvert had not been done.

THE COURSE OF THE PROCEEDING

[8] The hearing itself was on 7, 8, and 9 February 2000. There were a number of briefs of evidence for the plaintiff and the defendant. All of those briefs of evidence are extant, in good form, on the District Court file. They are able to be read in their entirety. The oral part of the proceedings, including most critically for present purposes the cross-examination, was taped.

[9] Willy DCJ reserved his judgment. A written decision was delivered on 2 March 2000. An amended reserved decision was delivered on 26 April 2000.

[10] The Greens then filed an application to recall that decision. That was dealt with by Willy DCJ in memoranda dated 2 and 24 October 2000, although the actual judgment on the recall application was not given until 13 February 2001.

[11] It appears that what lay behind that skirmishing was that after the merit judgment there was a dispute between the parties as to whether or not the Greens subrogated claims for insured losses should bear interest. In a Minute dated 28 June 2000, the Judge had declined to rule on that dispute. He said that matter was “an open question which the plaintiffs are entitled to pursue if they so [wish] on an application to recall the judgment”.

[12] In any event, on the merits of the recall application Ms O’Rourke had argued that the City Council was simply being obstructive in not agreeing to the amount sought being included in the final judgment of the Court. Counsel for the City Council complained about the delays which had occurred on the part of the plaintiffs in pursuing the recall application. He contended that any application for recall of a judgment should be promptly and vigorously pursued - which had not been the case here.

[13] In the result, on the recall application, Willy DCJ took the view that there was an absence of prejudice to the City, and that the delay had not been unconscionably long. He said “it would be wrong to deprive [the Greens] of the opportunity of attempting to rectify what may well be a simple omission of the Judge to consider the question of interest on a significant part of the amount recovered”.

[14] The recalled judgment was sealed by the Court on 26 March 2001.

THE CITY APPEALS

[15] An appeal to this Court was then lodged timeously on 11 April 2001.

[16] Under the relevant practice note, in this Registry an initial conference is held on all civil appeals by the List Judge to ensure that the appeal is in proper order to proceed to a hearing. By the time that conference was held it had become apparent that, in accordance with a practice apparently adopted in the District Court at Hamilton, the tapes containing the Notes of Evidence had been wiped. Ms GM Gardiner, an Assistant Deputy Registrar in the District Court, has carefully checked the position with the relevant Court Reporters. The Court has been assured that “in fact the tapes have been wiped”. This erasure seems to have been prior to the sealing of the Court judgment, and certainly prior to the appeal having been lodged with this Court. This came about, apparently, because the Hamilton District Court practice has been to wipe tapes twelve months after a hearing.

THE ISSUE

[17] When that fact became apparent, I invited counsel to consider whether the cross-examination was needed for the appeal. Counsel differed in their views on that issue. I therefore asked them to file written submissions. With the consent of counsel, I am now disposing of the issue before me on the basis of the memoranda they have submitted.

[18] That issue is: can this appeal fairly and appropriately be determined without the benefit of a record of the cross-examination? If the answer is “no”, counsel thought that it must follow that the appeal would have to be allowed, the proceeding remitted to the District Court for rehearing, and (presumably) the parties would then have to take up with the relevant administration the question of whether there should be a contribution by it to the costs thrown away by the parties on the abortive hearing.

THE SUBMISSIONS FOR THE CITY COUNCIL

[19] Mr Taylor has responsibly accepted that there is enough material extant before the Court that a reviewing Judge could determine the correctness of Willy DCJ’s findings on the Rylands v Fletcher cause of action. Therefore I need say nothing more on that point. The difficulties lie, he said, with respect to the negligence cause of action.

[20]The first point to be made here is that the lack of a full record is complicated by the vagueness of the plaintiffs’ initial claim.

[21] In the conventional view, “negligence” has three elements: a duty to take reasonable care owed at the time of the act of negligence by the defendant to the plaintiff; a breach of that duty by the defendant; and resultant damage which is both causally connected with the defendant’s breach, and not (in law) too remote. Nevertheless, whilst that traditional tripartite approach is convenient for analysis it does not eliminate consideration of the tort of negligence as a whole. (See Wilson & Horton v Attorney-General [1997] 2 NZLR 513, 519 (CA)).

[22] In this case, under the amended Statement of Claim on which the trial proceeded, the plaintiff pleaded a duty of care “by virtue of the following . . .”. There then appear ten enumerated paragraphs, the last three of which (36.8 to 36.10) refer to s 442 of the Local Government Act 1974 and the Building Regulations 1992. Those three items are more properly suggestive of an alleged breach of a statutory duty and, properly pleaded, should have been separated out, with whatever duties were said to arise thereout being properly particularised.

[23] The trial Judge himself plainly felt some discomfiture about the way the claim was being put (or, more precisely, the basis of the duty the City owed to the Greens). Nevertheless, he came to the holdings of negligence which I have enumerated in paragraph 7. In essence, His Honour’s concern seems to have been that, having decided to start on the work, the City did not get it up to what he termed a “professional standard”.

[24] The Council’s complaint is that in holding that there was a breach of a duty of care to carry out the work to a professional standard, the Court said, “this involved disregarding extraneous circumstances and focusing on the engineering requirements”. And secondly, the Court said “[the] Council has taken a calculated risk by deferring the upgrading of the railway culvert”. In arriving at those conclusions, in the Council’s view, the Judge simply “misunderstood the evidence”.

[25] Whether that be so or not, the Judge had to make a number of factual findings. It was important to understand what had actually happened; why the City had done what it had; and where the responsibility (if any) for taking any remedial action lay.

[26] A series of Council reports were put before the Court, and experts were called to assist the Judge. As Mr Taylor put it before me “it is . . . impossible to deal with this issue in the absence of the cross-examination . . .”.

[27] I think I have said enough, for present purposes, to indicate that Mr Taylor’s essential position is that on an appeal his interests have to be able to traverse the entire record if an appropriate challenge is to be made to the Judge’s factual findings on the negligence issues.

THE SUBMISSIONS FOR THE GREENS

[28] Ms O’Rourke stressed that a large amount of the material before the Court was in “record” form. It is still extant and available for appellate review.

[29] Ms O’Rourke also submitted that the two critical findings the Judge had come to, were that having embarked on a works programme (which was not in dispute) the Judge had found that programme was deficient in two respects - the stopbank was not high enough; and work on railway culvert was not done. She suggested that the cross-examination was not critical to those points. Hence the difference between counsel on this point is one of degree, and it is not easy to assess at this time.

[30] Ms O’Rourke then noted the costs and inconvenience to the parties if this case has to be reheard. The claims at issue are not large. Mr O’Rourke said, “the sealed judgment itself was for just $31,701.94 plus interest, uninsured loss of $11,785 plus interest, and general damages of $12,000”. In gaining that judgment, the Greens have expended actual costs (to date) of $68,195.67, plus GST of $8,524, and disbursements of $16,114.63 or, in all, $92,834.30.

[31] Ms O’Rourke also relied on Lau v Ogle (1998) 12 PRNZ 547. In that case, Cartwright J had felt able to avoid having to remit an appeal for rehearing where the tapes had also been erased because the briefs of evidence were still available along with the Judge’s own “clear, comprehensive and extensive” notes of the trial.

RESOLUTION

(i) Some general observations

[32] It is lamentable that tapes are still being erased in the District Court at an inappropriate time. This, despite constant warnings from High Court Judges. For instance, in Lau v Ogle (supra) Cartwright J said, “this is by no means the first time that Judges in the District Court have been embarrassed by the fact that notes of evidence in cases heard by them have been obliterated or not recorded at all” (at p3).

[33] That said, as a matter of fairness, I record that the obliteration of these tapes cannot, in any wise, be laid at the feet of the parties, or their counsel, or the Judge. What is startling about the present instance, is that it was perfectly apparent that the case was still under consideration through the latter part of year 2000. It seems that the tape wiping period of twelve months was simply calculated from the date of hearing when, with respect, the earliest it should have been contemplated was twelve months from the date of sealing of the judgment. And even that is problematical, from a design standard point of view, because a judgment may still be recalled.

[34] The impact on the civil justice system when the tapes are lost in a matter of this kind is appalling. The parties have already had to expend very considerable sums of money and undergo the trauma of a dispute about the flooding of their home, only to then have to toil through the exercise which has had to be conducted before me (at further expense). It must be fundamental to any system of civil justice that the parties be provided with a secure environment in which their cases can be heard; that they actually be heard (as by sound systems that work, and the like); that the evidence be properly transcribed; and properly stored. If ever the old adage “for the want of a nail a kingdom was lost” has any force, it surely applies to this wretched question of obliteration of hearing tapes from the District Court. And, quite apart from the impact on the parties, and the District Court workload, the integrity of the appeal system is imperilled when tapes are prematurely wiped.

[35] A second general point that I need to make is that I have some difficulty understanding Cartwright J’s concern in Lau v Ogle as to the impact of remission to the District Court, vis-a-vis the appropriate hearing Judge. Her Honour suggested (as a reason against remission) that, if a case is to be remitted, it would be unclear “whether the matter ought to be remitted to the same or to a different Judge”.

[36] I would have thought the principle to be that if a case is remitted it is heard again, de novo. Neither the plaintiff, nor the defendant, should start with any advantage. Accordingly, in my experience, at least as a matter of practice, it has always been thought highly desirable to have a case heard anew before a different Judge. It would be quite wrong if a (successful) respondent was to be sent back with some kind of “head start” to the same Judge in the District Court, merely so that, in effect, the gaps in a missing record could be filled out. The dangers in such a course are quite apparent.

(ii) This case

[37] This was not a straightforward “credibility” case of a variety routinely struck in the District Court. This was, in fact, quite a difficult negligence claim. It intruded into the vexed area of whether what the Council was doing amounted to a matter of policy or a matter of operation. Those sorts of issues have recently given senior appellate courts some difficulty.

[38] I understand the Council’s position here, on the evidence, was that it could not do anything about the railway culvert because of the ownership issues. And, in any event, there were conflicting views amongst the experts as to what should have been done.

[39] It would be quite true to say (as Ms O’Rourke did) that in situations of that character, an appellate Court might be persuaded (on the record) that a particular inference could not be drawn, or that thus and so had not appropriately been made out. But it is equally true, as Mr Taylor said, that to be able to reach a sound conclusion as to whether the holdings by the trial Court were satisfactory, an appellate Court has to be able to review the whole record.

[40] Then there is this point. Some very strong findings were made against the City Council in this case. The Judge said:

“The work on the railway culvert was not done. This failure did not stem from the proper exercise of the discretion (it had the right to stage the works as it thought desirable having regard to all relevant considerations) but from some misconception about its right to do the work. That is putting it at the most favourable to the defendant. A further possibility is that it deliberately used this as an excuse to avoid spending the money needed to enlarge the railway culvert.” (Italics added).

[41] The Judge did not support that criticism - of an ulterior motive on the part of the Council for what had occurred - by any reference to the evidence. I have no doubt that that item alone would be a matter of considerable concern on an appeal because a governmental authority is surely entitled to defend itself against an unsubstantiated finding of that character (if such it was) on appeal.

[42] Whatever ultimately may be made of that point, each case turns on its own facts. Here, I have great difficulty in seeing how an appeal on the negligence cause of action could possibly be fairly conducted when it is said that a stopbank was built too low and that a local authority may have acted inappropriately (or at best, misguidedly), without the cross-examination being available.

[43] I have struggled anxiously with the costs and inconvenience of the case being remitted for a rehearing on this cause of action. This is one of those awful cases in which the civil justice system has already produced, in economic terms, a negative return. Apparently, even District Court justice is more expensive than a claim for $50,000 is worth. Both economists and humanists can only writhe in kafkaesque despair at such an outcome. But the difficulty is that justice must be even handed. The injured figure of justice would not be repaired now by requiring an appellant to conduct an appeal without a proper record.

[44] For the reasons I have given, in my view it is necessary that there be a rehearing of this case in the District Court, on the negligence cause of action.

CONCLUSION

[45] This leads to the next point. Counsel seem to have seen the issue presently before me as involving “all or nothing”. That is, either the entire case is remitted now or not at all.

[46] Fortunately, s 77 of the District Courts Act 1947 is in very wide terms (see, of particular relevance to this matter, s 77(1)(a) and s 77(2)).

[47] For the City to succeed it has to clear off both causes of action.

[48] In my view, s 77 is wide enough to permit me to order - as I do - that the judgment of the District Court will be set aside in its entirety so far as it pertains to the negligence cause of action. To that extent, the proceeding will be remitted to the District Court for a hearing (if necessary) on that cause of action only. That leaves both the judgment and damages on the Rylands v Fletcher cause of action intact. The appeal on that cause of action can be determined, forthwith, in this Court.

[49] I appreciate that the damages awarded in negligence are greater than under the Rylands v Fletcher claim. But if the City is unsuccessful in its appeal under that head, it may be that the differences between the parties could be compromised - or the negligence rehearing can be rerun, if that has to be.

[50] In any event, I direct that the appeal is to be determined prior to the rehearing in the District Court. The City’s Points on Appeal on the Rylands v Fletcher claim are to be filed within fourteen days. The City’s written submissions are to be filed within twenty-eight days. At the same time, the City is to lodge an indexed Case on Appeal and serve it. The Greens written submissions are to be filed within fourteen days thereafter. A fixture for the determination of the appeal is then to be allocated.

[51] There will be no order for costs.

[52] Counsel should be able to settle an appropriate order. If they cannot, I will hear them in Chambers in the usual way.

Judgment accordingly.