Helilogging Limited (in receivership and liquidation) v Civil Aviation Authority of New Zealand

[2015] NZHC 2503

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-011204 [2015] NZHC 2503

BETWEEN

HELILOGGING LIMITED (IN

RECEIVERSHIP AND LIQUIDATION) First Plaintiff/Respondent

MARK WAYNE FORD IN HIS CAPACITY AS TRUSTEE OF THE WESSEX TRUST

Second Plaintiff/Respondent

MARK WAYNE FORD Third Plaintiff/Respondent

AND

CIVIL AVIATION AUTHORITY OF NEW ZEALAND Defendant/Applicant

Hearing:

8 and 9 June 2015, with supplementary submissions, 22 June

2015

Appearances:

L J Taylor QC, G M Richards and C Zhu for
Defendant/Applicant
P J Dale and E Telle for Plaintiffs/Respondents

Judgment:

13 October 2015

JUDGMENT OF ASSOCIATE JUDGE OSBORNE ON DEFENDANT'S SUMMARY JUDGMENT

Introduction

[1]      The  plaintiffs  (collectively  “Helilogging”),  by  an  amended  statement  of claim, sue the defendant (the CAA) for losses sustained on their intended heli- logging business from 2005.1     Helilogging asserts three causes of action in tort

being:

1Heli-logging, or helicopter logging, uses helicopters to remove felled trees from forests by lifting them on cables attached to a helicopter.

HELILOGGING LIMITED (IN RECEIVERSHIP AND LIQUIDATION) v CIVIL AVIATION AUTHORITY OF NEW ZEALAND [2015] NZHC 2503 [13 October 2015]

·         deceit;

·         misfeasance in public office; and

·         negligent misstatement.

[2]     On this interlocutory application the CAA seeks summary judgment (defendant’s) on all causes of action.  Alternatively it seeks an order striking out all Helilogging’s claims.

[3]      The plaintiff’s original statement of claim pleaded deceit as a single cause of action.   The defendant’s initial application therefore related only to that cause of action.   On the very day timetabled for the defendant’s submissions, the plaintiffs filed their amended claim containing what are now three causes of action.

[4]      The CAA is a Crown entity for the purposes of s 7 Crown Entities Act 2004. It regulates and promotes civil aviation safety for heli-logging.

Background

The heli-logging project

[5]      Mark Ford (Mr Ford) is variously a director of the first plaintiff, the second plaintiff (in his capacity as a trustee) and the third plaintiff in his personal capacity. He was based in Taranaki and worked in the logging industry in the late 1970s. From 1987, he conducted heli-logging operations using single engine helicopters.

[6]      In  2000,  another  operator  imported  a  twin-engine  helicopter  (a  Wessex Mark 5) into New Zealand for heli-logging purposes.   Mr Ford investigated the opportunity, finding the Wessex to be highly regarded, safe, and capable of lifting much bigger loads than the helicopters he had used.   From 2002, he consulted experts as to a potential operation involving Wessex helicopters.   The CAA was consulted through its Manager of Aircraft Certification.   As a result Helilogging prepared a proposal for a heli-logging operation employing Wessex Mark 2 helicopters (Wessex Mk 2).

[7]      The  Wessex  Mk  2  had  in  New  Zealand  an  external  load  prohibition. Discussions identified that Helilogging would need to obtain an exemption from the general prohibition on external loading and, in the view of the CAA, would also require an exemption from the hire and reward provisions of the Civil Aviation Act

1990.  There were discussions about those particular requirements and the need for Helilogging to satisfy conditions as to support from the Wessex manufacturer, the implementation of specific maintenance programmes, and the testing and implementation of a manual of operational practices  for the Wessex  Mk 2.   In January 2003, Helilogging identified two Wessex Mk 2 as appropriate for purchase. In  February 2003 it paid $2,863,000 for their  purchase.    Discussions  continued through 2003 and the first half of 2004 which Helilogging understandably (upon the evidence filed in this interlocutory context) found to be encouraging.

[8]      In May 2004, as Helilogging was preparing for flight trials in relation to the Wessex Mk 2, Mr Ford detected what he considered to be a change of attitude by the CAA.  The change was evidenced by the CAA’s refusal to permit flight trials which involved actual logging practice.   As the year proceeded, Mr Ford also observed what he considered to be a change in the attitude of the CAA in relation to the hire and reward issue.   Mr Ford increasingly found a disparity between affirming statements by some CAA personnel and a reservation of the ultimate decision.   In November 2004, Mr Ford wrote directly to John Jones, the Director of the CAA (with whom he had not previously spoken).  Mr Ford stated that he was at his wits’ end after two years on the project and he requested an immediate response as to when a decision would be made.   However, a substantive response was not immediately forthcoming.

[9]      On 26 July 2004, Helilogging presented to the CAA an exemption petition in relation to external loading.2     Exemptions from the Civil Aviation Rules may be made by the Director of the CAA pursuant to s 37 of the Civil Aviation Act 1990 (the CA Act).

[10]      In November 2004, Helilogging issued proceedings against the CAA and the

Director.    Helilogging  sought  either  an  order  in  the  nature  of  mandamus  or  a

2      Under Civil Aviation Rules 1995, r 21.43(1).

mandatory injunction  as  to  the  finalising  of  the  applications.    Helilogging  then presented a second exemption petition to the CAA, this time in relation to the hire and reward provision of the CA Act 1990.3   (I will refer to the petitions collectively as “the applications”.)

[11]     The Director filed an affidavit identifying a “seven stage process”, including the receipt of a written report before Christmas 2004, which he deposed he was pursuing.

[12]     When  the  matter  came  before  the  High  Court  on  16  December  2004, MacKenzie J  declined to intervene  with directions as to process.4     His Honour indicated an expectation that the Director would do his best to action the matter expeditiously according to the seven stage process the Director had outlined.   On that basis the Court made no orders other than to adjourn the proceeding.

[13]     The seven stage process then in place, which Helilogging accepted, was: (1) written recommendation report to Director;

(2)     letter to Helilogging requesting any further information; (3)          written recommendation report to the Director;

(4)     consideration of report and preliminary consideration by Director; (5)         preliminary decision to be provided to Helilogging for comment;

(6)receipt  of  comments  and  consideration  by  the  Director  with technical advisors needed;  and

(7)     final decision.

3      Civil Aviation Rules 1995, r 91.105(a).

4      Helilogging Ltd v Civil Aviation Authority of New Zealand HC Wellington CIV-2004-485-2558,

16 December 2004.

[14]     On 25 November 2004, the Director had appointed John Fogden (the CAA Manager “Rotary Wing”) to manage the Helilogging issues in place of previous personnel, notably John Lanham, the CAA’s General Manager of General Aviation. Mr Fogden provided a report to the Director (the Director’s stage 1) on 23 December

2004 recommending that more information be obtained from Helilogging before further consideration was given to granting any exemption.  On 24 December 2004, the Director forwarded the Fogden Report to Helilogging requesting further information. This completed the Director’s stage 2.

[15]     Extensive discussion and exchange of further information followed.   Jim Barclay of Aaleda Systems Limited provided expert advice to Helilogging as to the safety  and  other  aspects  of  Helilogging’s  proposed  operation.    He  did  so  by numerous iterations of a report commencing in February 2005 and culminating in a revised report on 20 June 2005 (the Barclay Report).   Earlier iterations and the June 2005 version were provided to the Director in answer to the Director’s requests for further information.

[16]     Through this period Helilogging’s lawyers (in particular Graham Takarangi) were  involved.    In  February 2005,  the  Director,  in  response  to  a  request  from Mr Takarangi, identified Mr Fogden and David  Gill as the persons advising the Director in relation to the Helilogging issues.   The Director received a written report from Mr Fogden dated 10 May 2005.  Mr Fogden recommended that the Director’s preliminary decision should be to decline both applications for exemptions.

[17]     Charles  (“Bernie”)  Lewis  became  involved  with  the  Helilogging  issues around this time.  Mr Lewis has filed two affidavits in this proceeding in relation to the events of 2005.   The first dealt with events from June or July 2005.   In the second,  a  reply  affidavit  which  responded  to  plaintiffs’  evidence  concerning Mr Lewis’s  earlier  diary  records,  Mr  Lewis  explained  the  beginning  of  his involvement in April 2005.

[18]     Mr Dale, for Helilogging, takes the position that Mr Lewis and the CAA witnesses have seemingly misled the Court about the circumstances of Mr Lewis’s engagement  and  the  reasons  for  a  letter  he  subsequently  provided.    The  CAA

strenuously denies that contention.   Factual differences and inferences cannot be resolved in a summary judgment context, but the general narrative of Mr Lewis’s involvement (stripping out suggestions of manipulation and dissembling conduct) is clear. A brief chronology is:

·         Mr Lewis was in his mid-seventies.

·Mr Lewis was a very experienced and respected helicopter test pilot and had been involved in the United Kingdom in the early Wessex development work.

·Mr Lewis and Mr Barclay (Helilogging’s expert) had subsequently overlapped as employees at the CAA some years earlier.

·In April 2005, Mr Fogden engaged Mr Lewis to become part of a CAA working group reviewing rules on a project unrelated to Helilogging.

·In early May 2005, the CAA provided Mr Fogden with a copy of the then-current version of the Barclay Report; Mr Fogden and Mr Lewis had extensive discussions on the Wessex development.

·While in Auckland on 19 May 2005, Mr Lewis visited Mr Barclay, discussing his report and commenting on it as a good and well researched report.

·Mr Barclay formed the view that Mr Lewis should be approached to contact the CAA to provide support for Helilogging’s applications.

·In  a  powerpoint  presentation  to  the  CAA  on  13  June  2005,  the Helilogging   representatives   (including   Mr   Barclay)   identified Mr Lewis as being a person who supported Helilogging but without first having obtained Mr Lewis’s approval to do so.

·        The final version of the Barclay Report followed on 20 June 2005.

·In  July  2005,  the  Director  and  Mr  Fogden  met  Mr  Lewis  in Wellington and asked him to provide a letter as to the safety of Helilogging’s proposed operation.

·        On  23  July  2005,  Mr  Lewis  provided  a  letter  to  the  Director  in

relation to the “Wessex 2” (the Lewis letter).

The Lewis letter

[19]     The Lewis letter (amended by hand in two places) is Schedule 1 to this judgment.  The Lewis letter was received by the Director without the handwritten alterations.

[20]     It is common ground that when Helilogging was provided with a copy of the Lewis letter, the copy contained the two alterations.  The first amendment was to the penultimate paragraph  of the letter where the  word  “viability”  was  deleted  and replaced (in handwriting) with the word “safety”.  The second amendment was in the third paragraph of the letter where the reference to a Wessex helicopter flown by Mr Lewis was amended by deleting the number “5” from “Mk 52” so as to appear to read “Mk 2”.

[21]     The Director had reached stage 3 of the seven-stage process, in that he now needed a written recommendation report.   Mr Fogden was again to be the report writer.

[22]     On 9 August 2005, Mr Fogden presented to the Director a document entitled “Final report: Helilogging Limited’s proposal and exemption applications”.  In a 48- page report, Mr Fogden reviewed, amongst other material, the Barclay Report and the Lewis letter.   Mr Fogden noted that Mr Lewis’s technical and operational knowledge was unique and concluded:

I place a great weight on Mr Lewis’ operational experience of the Wessex aircraft.  On this factor alone, you could not, in my view, be satisfied that the “risk to safety will not be significantly increased”.

Mr Fogden concluded his report by recommending that the Director decline both applications.

[23]     On 19 August 2005, the Director prepared a memorandum recording the reasons for a final decision to decline both Helilogging’s applications.  The decision referred to a number of factors including Mr Lewis’s comments regarding his “grave doubts about [the Wessex’] safety for the tasks as suggested by Heli-logging”.  The Director concluded that he was unable to be satisfied that the risk to aviation safety, in the event the applications were granted, would not be increased.

[24]     On the same day, the Director, by letter, advised Helilogging of his decision to decline Helilogging’s applications.   With the declinature letter, the Director provided Helilogging with a copy of his memorandum and of the Lewis letter which contained the two handwritten amendments.

[25]     On 15 and 22 August 2005, Mr Barclay wrote to the Director and to the

Chairman  of  the  CAA  requesting  clarification  of  the  Director’s  decision.    On

22 August 2005, the Director replied directly to Helilogging explaining his position.

Scope for a 2005 judicial review proceeding

Helilogging’s evidence for the hearing

[26]     Mr Ford provided a lengthy affidavit as to Helilogging’s dealings with the CAA.   The first portion (approximately 144 paragraphs) covered events up to the Director’s declinature.  There then follow some 30 paragraphs concerning the Lewis letter and “its wrongful alteration”.  The affidavit concludes with the effects of the CAA’s actions upon Helilogging and the Fords.

[27]     I have considered Mr Ford’s evidence carefully.  A notable omission is any account  by  Mr  Ford  of  Helilogging’s  appreciation  of  flaws  in  the  Director’s

19 August 2005 decision or understanding of the rights which Helilogging and the Fords may have had to pursue redress.   In that regard, I was left to review the evidence of witnesses other than the Ford family and the documentary record.

[28]     Terence  Haydon  was  a  director  of  one  set  of  Helilogging’s  financiers. Mr Haydon deposes that Mr Ford contacted him in August 2005 to advise him of the Director’s declinature.   Mr Ford explained that safety concerns were the primary reason given, and that the CAA had relied upon the Lewis letter.  Mr Ford invited Mr Haydon to a meeting to discuss the way forward after the Director’s declinature. Mr Haydon deposes that Mr Ford and a colleague said that they wanted to discuss Mr Haydon’s funding of an application for judicial review.  Mr Haydon declined the request concluding that if the CAA had safety concerns, there was little prospect of the applications being granted.   Mr Haydon’s company subsequently decided to exercise its legal remedies against Helilogging.  It placed Helilogging in receivership in October 2006.  Mr Haydon deposed that later, in June 2008, his company and the receivers negotiated a settlement package with Mr Ford.   Mr Ford continued to seek funds for a judicial review but Mr Haydon declined for the same reasons as before.

[29]     It appears that those associated with the Helilogging interests met in Taranaki upon receipt of the Director’s declinature to discuss it.  In an email to Mr Lewis on

24 August 2005, Mr Barclay recorded that he had been involved in the meeting and that those present had “reviewed the Fogden report, your letter, compensation claim, etc”.   Mr Barclay recorded that the Helilogging interests had noted a number of significant errors in the information Mr Lewis had presented to the CAA, including:

(a)      technical  changes  to  the  helicopters  and/or  engine  (including  fuel drains, control computer system and engine features) which had occurred since Mr Lewis’s “era”;

(b)Mr Lewis had made assumptions without foundation (including in relation to fuelling practices, spare parts and a 2001 accident at Motueka);

(c)      ground  resonance  should  not  have  been  regarded  as  a  significant issue; and

(d)Mr  Lewis’s  “huge  leap”  from  “information  of  [his]  “era”  to  the current state of the helicopter was in error.

Mr Barclay concluded that much had changed since Mr Lewis’s time.  He invited Mr

Lewis to review his letter.

[30]     Mr Lewis responded in a brief email the following day in which he recorded:

Thanks Jim.

I take on board what you have said.  As I said before, your report was very good.  It still is.

Regards, Bernie.

Mr Lewis has deposed that he did not consider that he needed to change his letter.

[31]     It  appears  that  around  mid-September  2005,  Helilogging  made  some important decisions as to how it would proceed.  On 16 September 2005, it filed a discontinuance of the 2004 High Court proceeding.5     Around the same time, it endeavoured to lodge a notice of appeal under s 66 of the CA Act against the Director’s declinature of the two applications.  The District Court declined to accept the notice of appeal as the Act did not contain a right of appeal from the decision to decline an exemption under s 37 of the CA Act.

[32]     The Court has not been provided with detail of communications between the parties for the eight weeks following the attempted appeal.  Mr Ford, in that period, spoke to Brian Taylor, who was to have been responsible for the training side of Helilogging's operations.  Following the Director’s declinature, Mr Taylor travelled to Stratford on 14 December 2005 and reviewed the correspondence.  At Mr Ford’s request, he wrote a short letter.  He recorded his comments on the eight numbered paragraphs in the Lewis letter.  He concluded that the Mk 2 Wessex would be as safe as any other helicopter (assuming good pilot training, engineering maintenance practices and high standards for spares, storage and environmental control).

[33]     Mr Ford forwarded Mr Taylor’s letter to Mr Lewis on 14 December 2005. He noted the great weight which the Director had attached to Mr Lewis’s conclusion

as to “safety”  and  also  Mr Lewis’s  change of the word  “viability” to “safety”.

5 Above at [10].

Mr Ford stated that he did not see how Mr Lewis could say that the Wessex was unsafe and invited Mr Lewis to retract his letter on the basis of Mr Taylor’s letter.

[34]     In response, Mr Lewis maintained that what he had said in his letter was fact but he admitted that it was 40-year old fact and that things could have changed. Mr Lewis said that, upon the basis of his discussions with people in the industry, it would appear that Helilogging had a very good case.  He stated that Mr Barclay had put  up  a  very  good  and  compelling  case  for  the  Helilogging  operation  and  he (Mr Lewis) thought that Mr Ford should continue with it.  Mr Lewis concluded that he did not feel that he could withdraw what he had written to the Director.

[35]     On 9 January 2006, Mr Barclay sent a brief email to Mr Lewis.  He stated that the damaging effect of Mr Lewis’s letter was immense and that Mr Lewis should consider his liability for its use (or misuse).  He stated that Mr Lewis’s letter would receive some scrutiny in 2006 at some fairly high level forums.  To this brief email, Mr Barclay attached what he described as his “estimate of what would happen”.  In the six-page “question scenario” which follows, Mr Barclay sets out a point-by-point cross-examination of Mr Lewis upon his letter.  Questions are put which are intended to show that Mr Lewis based his letter on incorrect premises and irrelevant considerations.   Mr Barclay concludes that there seems to be a “huge leap” from information of Mr Lewis’s “era” (three or four decades earlier) to the conclusion that the Wessex Mk 2 was unsafe for the proposed tasks.  The cross-examination scenario also asked Mr Lewis to identify who (if anyone) asked him to change the word “viability”  to  “safety”.    There  is  no  evidence  of  a  response  by  Mr  Lewis  to Mr Barclay’s email.

[36]     On 3 March 2006, the Director issued a prohibition pursuant to s 21(2) of the CA Act.  He prohibited the operational use of New Zealand aircraft registered with special category airworthiness certificates on hook-load operations.   On 30 March

2006, Helilogging filed an appeal against the prohibition order.   (The appeal was discontinued subsequently on 19 September 2006).

[37]     On 21 July 2006, Helilogging, above the signature of Mr Ford, wrote  a

16 page letter to the Director as to the outstanding issues between Helilogging and

the CAA.   These included the Director’s 19 August 2005 declinature of the two

applications.  Mr Ford introduced the discussion of those applications thus:

On the 19th August 2005, you declined these applications.  Unless a solution can be found in respect of these applications, HLL will have no option but to pursue a legal remedy.

We believe that the matters which caused you to reach your decision narrow down to a very few issues, all of which can be dealt with to your satisfaction, if you are prepared to consider our proposals. We are aware that at this stage the normal forum would be a High Court Judicial Review.   However, it would be in both parties’ interests in terms of time and costs, if these issues could be dealt with by negotiation.

[38]     Mr Ford first identified a failure by the Director to comply with the seven- stage process.  He next referred to what he described as “a genuine misunderstanding by both parties” of the intended role of the Regulatory Authority, which had affected the applications.

[39]     Mr Ford then  turned  to  the  Director’s  conclusion  that  there  would  be  a significant, increased risk to safety.   He critiqued the Lewis letter identifying four concerns:

1.CAA do not appear to have verified the evidence knowing that it was very dated and could be no longer applicable.

2.CAA have chosen to accept this evidence without question over that of expert evidence from Mr J. Barclay and the Manufacturers, GKN Aerospace, which is more current and therefore of greater relevance.

3.CAA did  not  give  HLL the  opportunity  to  respond  to  this  new evidence contrary to the undertaking you gave to both the Court and the Transport Select Committee.

4.CAA actions suggest a “confirmation bias” whereby you appear to have wanted the evidence to match a pre-determined outcome to the applicable process.

[40]     Mr Ford challenged conclusions relied upon by the Director as to ex-military helicopter accident rates, concluding that it was “unreasonable” to apply particular rates.  In relation to the Director’s exercise of a broad discretion, Mr Ford made a number of criticisms including that new policies had been introduced without advice to Helilogging and in breach of the seven-stage process.   In a four-page set of conclusions, Mr Ford complained of misunderstandings, improper assessments, and

retrospectively applied policies.   He complained that the Lewis letter represented evidence as to “the position 40 years ago”.  He proposed that the litigation cease and that the CAA implement new policies.   Mr Ford required a response by 7 August

2006.

[41]     On 28 July 2006, Mr Barclay spoke to the Director directly, a conversation recorded in an email shortly afterwards.   Mr Barclay asserted that there was no safety issue with the Wessex Mk 2.  He stated that the Lewis letter had been shown to be flawed and should have been promptly rejected by the Director.  He went on to note a number of areas (including in relation to the hook-load prohibition) on which the Director had been “badly advised”.

[42]     The Director responded directly to Mr Ford by letter dated 22 August 2006. He regarded Mr Ford’s letter of 21 July 2006 as raising no new information.  He was not prepared to review the declinature in the absence of any further relevant information of a technical nature.

[43]     On  19  September  2006,  Helilogging  discontinued  its  prohibition  order appeal.  Receivers were appointed to Helilogging on 6 October 2006 and remain in place.

The 15 March 2007 agreement

An agreement to enable Helilogging to pursue judicial review

[44]    The events described by Mr Ford and Mr Haydon in their affidavits in opposition did not cover developments around March 2007 between the receivers, Mr Haydon’s company (as a financier) and Mr and Mrs Ford.  Mr Haydon referred to a settlement package negotiated between those parties in June 2008 but not to an earlier (15 March 2007) agreement between the same parties.  The receivers’ third report dated 20 December 2007 identifies in paragraph 2 the Director’s declinature decision and then states:

Mark and  Suzanne Ford, through their solicitor, Graham Takarangi,  and

Barrister, Timothy Castle, wished to challenge this decision.  On 15 March

2007, an agreement was reached with the financiers of HHL and various other Ford Entities to challenge this decision in the High Court.

The Judicial review did not proceed and on 3 September 2007 the receiver terminated that agreement. The decision to terminate was made as a result of continued and long standing breaches of disclosure and the receiver not obtaining the full co-operation required under that agreement from Mark Ford.

The receivers have requested all the files and documents relating to the CAA

application but have not yet been provided with the information.

[45]     As the Court became aware of the matters referred to in the receivers’ report after the close of submissions, I invited further submissions.  Counsel accepted that the  evidence  available  to  the  Court  should  include  the  information  as  to  the

15 March 2007 agreement.  Counsel filed supplementary submissions concerning it. The plaintiffs filed additional affidavits of Mr Haydon and of David Miller.

[46]     The 15 March 2007 agreement was entered into both by the company in receivership (now the first plaintiff) and, amongst others, Mr Ford (who in different capacities is both second and third plaintiff).  By 15 March 2007, those parties had apparently identified the opportunity to apply for judicial review in relation to the Director’s  declinature  decision.    The  reason  that  the  company itself  (as  against Mr and Mrs Ford) elected not to pursue the judicial review lies in the receivers’

3 September 2007 termination of the 15 March 2007 agreement.

[47]     A peculiar feature of Mr Ford’s initial evidence (I refer to both his first affidavit in opposition and his affidavit “in reply”) was that he did not identify why judicial review was not pursued.   Nor did he identify discussions or agreements reached with the receivers (or Helilogging’s financiers) about challenging the Director’s decisions.

[48]     I turn to the additional evidence and submissions filed after the hearing.

Mr Haydon’s evidence on the 15 March 2007 agreement

[49]     Mr Haydon filed an additional affidavit, attaching a copy of the 15 March

2007 agreement between Helilogging (including the Fords) and their financiers, the

3 September 2007 letter by which the receivers cancelled the 15 March 2007 agreement, and other correspondence.

[50]     By the 15 March 2007 agreement, the parties dealt with judicial review.  The agreement contained a definition clause:

Judicial Review (JR) is defined as completion of the High Court Judicial Review and any reconsideration by the Director of the NZ CAA as may be ordered by the Court.   This does not include any appeals following the Judicial Review and any reconsideration by the NZ CAA.  Proceeding with any appeal will be at the discretion of the Finance Companies and the Receiver.

[51]     The agreement contained a regime for dealing with the assets of Helilogging (including the Fords) dependent  upon  the outcome of the judicial  review.   The agreement was expressed to be conditional upon the full cooperation of the Fords in the implementation of the agreement (including the judicial review aspects) to the satisfaction of the receivers.  The agreement was also conditional upon Helilogging’s total disclosure to the receivers (and their agent) of all assets relating to the securities and the receivers’ being satisfied with that disclosure.   The agreement contained provisions as to what would happen until the final result of the judicial review was known and what would happen if the judicial review was successful.   The parties agreed that Tim Castle, a barrister, would be engaged to conduct the judicial review in the High Court and, if necessary and meritorious (which was to be decided by the finance companies), to the Court of Appeal.    The finance companies undertook to provide finance up to a maximum of $150,000 for the judicial review which would be held in the receivers’ trust account and released at their discretion.

[52]     In  his  second  affidavit,  Mr Haydon  deposes that  he did  not  support  the judicial review and that his finance companies were not prepared to fund or assist in funding a judicial review.   He deposes that he felt that any judicial review was doomed to fail because the Director’s declinature had been for safety reasons.

[53]     The other new affidavit filed for Helilogging was of Mr Miller, a director of Helilogging’s remaining creditors whose security ranked after that of Mr Haydon’s companies.  Mr Miller confirms that Mr Haydon had made it clear that he did not have any confidence in the success of a judicial review application.

[54]     Mr Haydon deposes that he was of the view that his companies would effect an acceptable recovery if the Wessex helicopters were sold in an unregistered state.

This contributed to Mr Haydon’s decision not to support a judicial review.   Mr Haydon deposes as to his belief that the receivers had no option but to be a party to the 15 March 2007 agreement by reason of the 2005 deed.  He explains that all the finance companies (that is, both Mr Haydon’s and Mr Miller’s) had “to some extent to go along with” the 15 March 2007 agreement because of an earlier security sharing  deed  which  required  the  agreement  of  all  parties  to  the  sale  of  the helicopters.

[55]     In submissions accompanying the additional evidence of Mr Haydon and Mr Miller, Mr Dale submitted that the contents of the 15 March 2007 agreement did not undermine Helilogging’s case and that Mr Haydon had “acted consistently throughout”.

[56]     Mr Taylor, in reply, submitted that the new material supports the CAA’s applications in that the 15 March 2007 agreement evidences the plaintiffs’ actual knowledge of their ability to challenge the Director’s declinature.  By reference to both the agreement and Mr Haydon’s second affidavit, Mr Taylor submitted that the following is clear:

(a)      By  15  March  2007,  Helilogging  had  received  legal  advice  and obtained agreement to fund a judicial review proceeding to challenge the Director’s Declinature.

(b)The  judicial  review  proceeding  was  not  pursued  by  Helilogging because there was subsequently a breakdown between Mr Ford and the receivers.

(c)      The evidence provided by Helilogging in opposition to the CAA’s applications (as contained in Mr Haydon’s first affidavit and by the omission of any detail in Mr Ford’s affidavit) was misleading.

[57]     Helilogging took issue with the submission that Mr Haydon had misled the Court.    I  gave  leave  to  Helilogging  to  have  Mr  Haydon  file  a  third  affidavit. Mr Haydon did so.  He went into some detail as to the complexity of arrangements

surrounding the 15 March 2007 agreement.  He emphasised that his refusal to fund Helilogging’s judicial review application was by reason of his confidence in the CAA’s concerns as to safety as an issue.

[58]     I observe at this point that it is unnecessary (and undesirable in a summary judgment context) that I reach conclusions as to any intent on the part of Mr Haydon to mislead the Court, whether by his initial failure to refer to the 15 March 2007 agreement or otherwise.  I do not make any such finding.

Mr Ford’s evidence on the 15 March 2007 agreement

[59]     I have observed that, in his evidence filed before hearing, Mr Ford did not identify why judicial review was not pursued.   Equally, he did not refer to the

15 March 2007 agreement.   There is, in fact, a chronological gap in the events covered by his evidence which jumps from 22 August 2005 (when the Director replied to queries raised by Mr Barclay on Helilogging’s behalf) to a meeting with the CAA in December 2012 which took place on a without prejudice basis.  To the extent that Helilogging referred in its initial evidence to events between August 2005 and December 2012, Mr Ford did that by reference to the evidence of Mr Haydon who referred to the “settlement package” of June 2008 but not to the 15 March 2007 agreement.

[60]     The failure of Mr Ford to refer to the 15 March 2007 agreement in his initial evidence is a significant omission.   More significant still was the absence of additional evidence from Mr Ford when the Court, following the hearing, identified the existence of the 15 March 2007 agreement.  The only supplementary evidence produced by Helilogging – that of Mr Haydon and of Mr Miller – speaks clearly of Mr Haydon’s lack of confidence in relation to Helilogging’s intended judicial review proceeding.     But  while  both  those  deponents  refer  to  Mr  Haydon’s  lack  of confidence, there is no similar observation in relation to Mr Ford.

[61]     For his part, Mr Ford has apparently chosen not to give evidence on the matter.  In the absence of such evidence, the irresistible implication of the structure of the 15 March 2007 agreement is that Helilogging (through Mr Ford) perceived that it had a good case in judicial review.  The correspondence written on behalf of

Helilogging   during   the   course   of   2006   evince   Mr   Ford’s   appreciation   of Helilogging’s case.   The plaintiffs had identified the particular grounds on which judicial review might be pursued, including the unreliability of Mr Lewis’s conclusions.  As the 15 March 2007 agreement itself makes clear, the barrister to have  the  conduct  of  the  judicial  review  application  and  any  appeal  (namely Mr Castle) had also been identified.   Helilogging has not adduced evidence from Mr Castle as to the conclusions which he reached and such advice as he gave at the time.  The fund of $150,000 to be established under the agreement for the judicial review proceeding indicates the seriousness with which the intent of litigation was being viewed.

[62]     Against the background of Mr Ford’s failure to give any evidence in relation to  the  15  March  2007  agreement,  the  only  proper  inference  is  that  any  sworn evidence Mr Ford could give on the subject would be against Helilogging’s interests.

[63]     It is therefore beyond argument that the plaintiffs knew that they had grounds

to attack the Director’s decision, at least by reason of the following matters:

·    the Director’s breach of agreed procedures and natural justice through failing to provide the Lewis letter to the plaintiffs before a decision was reached;

·    the Director’s pre-determination on the part of the Director evidenced by the replacement of an encouraging adviser with a “hostile” adviser;

·    the Director’s having regard to irrelevant material in the form of the “40

year old” experience of Mr Lewis in Wessex helicopters; and

·    the Director’s failure to have proper regard to relevant material in the

form of Mr Barclay’s evidence.

[64]     These are merely summarised versions of detailed grounds and instances of grievance which recur and are amplified within the plaintiffs’ contemporary correspondence.   If one applies the “statement of claim” test, the plaintiffs were

clearly in a position by 15 March 2007, if not earlier to complete a particularised application for judicial review, supported by affidavits.6

Factual conclusions from the evidence

[65]     I  find  the  factual  position  as  at  15  March  2007  to  have  been,  beyond argument, that:

(a)      Helilogging had  through  late-2005  and  2006  identified  considered grounds upon which to pursue an application for a judicial review in relation  to  the  Director’s  declinature  decision,  including  upon  the basis that the Lewis letter was unreliable.

(b)      Legal advice had been taken which supported Helilogging’s case.

(c)      Helilogging was able to persuade all its financiers to provide time and some of its financiers to establish a fund enabling the pursuit of the judicial review application.

(d)Mr Ford, as the animating mind of Helilogging, had confidence as to his grounds of judicial review application and as to the prospects of success.

(e)      The reason Helilogging did not pursue its judicial review application in 2007 was the financiers’ termination of the 15 March 2007 agreement,  which  occurred  when  Mr  Haydon  concluded  that  the Fords had not provided full cooperation in terms of the agreement.

Events after 2007

[66]     Helilogging has not provided evidence as to their “breaches of disclosure”

referred to in the receivers’ third report of 20 December 2007 which led to the

receivers’ decision to cancel the 15 March 2007 agreement.7   What is clear is that the

6 See below at [81].

7 Above at [44].

Fords still wanted to pursue judicial review but by late 2007 no longer had their

financiers’ support.

[67]   The next chronological event initially referred to by the deponents for Helilogging was the June 2008 negotiation of a settlement package between the receivers, their appointor (CFL) and Mr Ford.  Helilogging provides no detail as to the content of that settlement.   But Mr Haydon states that Mr Ford thereafter continued  to  seek  funds for judicial  review which  Mr Haydon  declined  for the reasons he had earlier given.

[68]     Mr Haydon refers to a later incident in November 2011 when he became aware of a farmer carrying logs under a helicopter using a similar process to that proposed by Helilogging.   Mr Haydon had discussions with Mr Ford.   In March

2012, Mr Haydon asked the new chairman of the CAA to have a look at the “Ford matter”.  He says that, around the same time, Mr Ford alerted him to the alteration in the Lewis letter by which “Mk 52” appeared as “Mk 2”.  Mr Haydon sent follow-up emails to the CAA chairman concerning the second alteration to the Lewis letter. Mr Haydon was involved with Mr and Mrs Ford in a without prejudice meeting with the CAA in December 2012. The meeting did not produce a resolution.

[69]     Mr and Mrs Ford say that in the meantime they had, around April 2012, discovered the second alteration to the Lewis letter as a result of Mrs Ford spotting, for the first time, the alteration when the documents relating to the CAA applications were spread on her kitchen table.  As neither Mr or Mrs Ford knew of a Wessex Mk

52 helicopter, they enquired into its existence.   They then had further discussions with Mr Haydon and were present at the inconclusive December 2012 meeting with the CAA.

[70]     In 2013, Mr Ford prepared to file a claim against the CAA.  From October

2014, he consulted a number of experts.  Their opinions were obtained in relation to the safety of the Wessex Mk 2, differences between the Mk 2 and the Mk 52, and other  issues.    Following  the  filing  of  Helilogging’s  statement  of  claim  on  6

September 2014 and the filing of the CAA’s interlocutory application, the plaintiffs’

opposition evidence included that of their experts.

Helilogging’s present proceeding and claims

[71]     Helilogging commenced this proceeding with one cause of action in deceit. In the current (amended) version of the statement of claim, Helilogging additionally pleads misfeasance in public office and negligent misstatement.

The plaintiffs’ pleadings common to the three causes of action

[72]     The plaintiffs’ central allegations, common to all three causes of action, are:

·    On  26  July 2004,  the Wessex Trust  (effectively  the  second  plaintiff) petitioned the CAA for an external loading exemption for the Wessex Mk 2 helicopter and the Ford Trust petitioned the CAA for a hire and reward exemption.

·    Following the 2004 High Court litigation, the CAA agreed to submit the applications to a seven-stage process.

·    On 19 August 2005, the CAA declined the applications, relying on the

Lewis letter which was provided to the plaintiffs with two alterations.

·    The  plaintiffs  were  unaware  that  the  Wessex  Mk  52  helicopter  is materially different in design and specification to the Mk 2 helicopter.

Allegations particular to the deceit cause of action

[73]     The plaintiffs materially plead:

·    The CAA on 23 July 2005 fraudulently provided them with copy of the altered Lewis letter.

·    The CAA, in approximately November 2012, provided them with what was represented to be an original Lewis letter but it contained the “viability”/“safety” alteration and the “Mk 52/Mk 2” alteration.

·    As a consequence of the CAA’s said actions, the plaintiffs were unable to:

o appreciate that they had grounds to mount a legal challenge; or

o mount such a challenge.

·    April 2012 was the first date on which  the CAA’s said conduct was

reasonably discoverable.

·    The plaintiffs incurred losses (direct or the loss of a chance), suffered general damages and are entitled to exemplary damages.

Allegations particular to the misfeasance in public office cause of action

[74]     The plaintiffs materially allege:

·    The  Director  (as  a  public  officer)  acted  unlawfully  in  breaching  the seven-stage process by:

o engaging Mr Lewis;

o not making the Lewis letter available to the plaintiffs before the

Director made his determination;

o pre-determining Helilogging’s applications;

o the CAA instigating alterations to the Lewis letter;

o withholding a copy of the unaltered Lewis letter; and

o engaging  Mr  Lewis  in  breach  of  his  fiduciary  duties  to  the plaintiffs.

[75]     The plaintiffs’ statement of claim contains no pleading of an intention on the

part of the Director in relation to the misfeasance pleading.

[76]     The plaintiffs rely on the same pleading of damages as for deceit.

Allegations particular to the negligent misstatement cause of action

[77]     The plaintiffs materially plead in relation to the negligent misstatement cause of action:

·    The  Director  negligently  provided  to  the  plaintiffs  the  altered  Lewis letter.

·    The Director did not comply with the seven-stage process.

·    The plaintiffs were misled because they believed that Mr Lewis was referring to the Wessex Mk 2 helicopter whereas he was referring to a Wessex Mk 52 helicopter, a materially different helicopter in 2005.

[78]     The plaintiffs plead that, as a result of the defendant’s conduct, they incurred losses of $5,231,896.50.  They seek also unparticularised and unquantified damages for loss of profits.   Finally, Mr Ford as third plaintiff seeks general damages of

$50,000 for stress, anxiety and inconvenience.

[79]     The plaintiffs rely on the damages as pleaded in relation to deceit.

The knowledge of the plaintiffs after the Director’s declinature

[80]    The central basis of the plaintiffs’ damages claims based on deceit or misfeasance is said to lie in the defendant’s fraudulent or concealing conduct.  The plaintiffs pursue either damages for the loss of a chance (the chance to successfully pursue judicial review) or a complete recovery of losses including both capital losses and loss of profits (on the basis that the two exemption applications would or should have been granted).  The third cause of action, for misstatement, pursues damages assessed on the same basis.

[81]     The state of mind of the plaintiffs is directly relevant to the issue of reliance on the alleged misrepresentations, to causation of loss and to mistake.  I have found it to be established, beyond argument, that by 15 March 2007, at the latest, the

plaintiffs  knew  that  they had  a  good  right  of  action  for  judicial  review  of  the

Director’s declinature decision.8

The defendant’s summary judgment and strike out applications

Defendant’s summary judgment application

[82]     The  starting  point  for  a  defendant’s  summary  judgment  application  is r 12.2(2) High Court Rules, which requires that the defendant satisfy the Court that none of the causes of action in the statement of claim can succeed.

[83]     I     summarise  the  general  principles  which  I  adopt  in  relation  to  the application:

(a)      The onus is on the defendant seeking summary judgment to show that none of the plaintiff’s causes of action can succeed. The Court must be left without any real doubt or uncertainty on the matter.

(b)The  Court  will  not  hesitate  to  decide  questions  of  law  where appropriate.

(c)      The Court will not attempt to resolve genuine conflicts of evidence or to assess the credibility of statements and affidavits.

(d)In determining whether there is a genuine and relevant conflict of facts, the Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts. It is not required to accept uncritically every statement put before it, however equivocal, imprecise, inconsistent with undisputed contemporary documents or other statements, or inherently improbable.

(e)      In weighing these matters, the Court will take a robust approach and enter judgment even where there may be differences on certain factual

8      Above at [64] – [65].

matters if the lack of a tenable defence is plain on the material before the Court.

(f)      Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment but does so in the context of the general purpose of the High Court Rules which  provide for the just, speedy and inexpensive determination of proceedings.

Striking out a claim – the principles

[84]     Rule 15.1 High Court Rules makes provision for orders striking out all or part of a pleading.  In this case, the CAA as defendant (in the alternative to its summary judgment application) invokes:

(a)      rule 15.1(1)(a): no reasonably arguable cause of action because the claims are statute barred; and

(b)rule 15.1(1)(c) and (d): frivolous, vexatious or otherwise an abuse of the process of the court.

The limitation period

[85]     By reason of the conclusions I shortly reach, it is convenient to first identify

the statutory provisions of limitation which apply to the plaintiffs’ causes of action.

[86]     The plaintiffs’ causes of action fall to be dealt with under the Limitation Act

1950 because the causes of action are based on acts or omissions before 1 January

2011.9     The plaintiffs plead three causes of action in tort – the applicable limitation period is therefore six years from the date on which the cause of action accrued, unless the plaintiffs can, in this summary judgment context, show it is arguable that the limitation period was postponed by reason of the plaintiffs’ cause of action being

concealed by the defendant’s fraud or unknown because of mistake.10

9      Limitation Act 2010, s 59.

10     Limitation Act 1950, ss 4(1)(a) and 28.

Cause of action in deceit

The change of “viability” to “safety”

[87]     The Director’s decision relied on safety concerns.   A central thrust of the plaintiffs’ case is that the altered Lewis letter was provided to the plaintiffs in order to have them accept that there was reputable expert opinion identifying safety issues in respect of the Wessex Mk 2 helicopter.  Responsibly, the plaintiffs do not plead that the handwritten alteration was unauthorised by Mr Lewis.   Mr Lewis has produced a copy of a letter which he wrote to the Director on 2 August 2005.  In it, he referred back his letter of 23 July 2005 and asked to make the amendment from “viability” to “safety”.  When one has regard to the comments contained earlier in the Lewis letter, the amendment from “viability” to “safety” is understandable.  The timing of the alteration does not detract from the fact that the Lewis letter, including the “safety”/“viability” alteration, is as requested by Mr Lewis.

[88]     The CAA did not conceal the alteration of “viability” to “safety” from the plaintiffs at the time.  Rather, the Lewis letter was provided to the plaintiffs with the “safety”/“viability” alteration in place and self-evident.

[89]     This fact led Mr Dale to submit that the significance of uncertainty of detail surrounding the “safety”/“viability” alteration is that it is possible that the CAA “instigated” the amendment.  But the identity of the instigator (whether Mr Lewis or someone at the CAA) is not material in the sense of “material aspect of the pleading of a judicial review application”.   At the most, it might have been an area for potential cross-examination designed to establish that Mr Lewis’s opinion (which raised safety concerns) was flawed and invalid.

The Mk 52/Mk 2 alteration

[90]     In  relation  to  the  change  to  the  Lewis  letter  whereby  “Mk  52”  became “Mk 2”, Mr Dale’s submission is that the change was not reasonably discoverable and that it was material.

[91]     Mr Dale submits that the evidence of Mr and Mrs Ford as to the April 2012 discovery of the Mk 52/Mk 2 alteration serves to indicate that the alteration was not reasonably discoverable. I am not persuaded that the Fords’ subjective experience in detecting the alteration is a measure of whether it was reasonably discoverable. Reasonable discoverability involves the Court’s objective assessment.  Nonetheless, the copy of the Lewis letter (reproduced at Schedule 1) is likely to reflect the quality of copy the Fords would have received.  On the basis of that document, it is at least arguable that it is unclear whether there had been a deliberate alteration.  It is also arguable that even a careful inspection of the letter would not have identified (at least reliably) that what was typed had read “Mk 52”.   It is therefore possible that the Fords and those they consulted could not reasonably have discerned that Mr Lewis had, at that point of his letter, been writing about a Wessex Mk 52.

[92]     I next examine whether the alteration is material.   A brief account of the history of the Wessex Mk 2, common to the evidence for both plaintiffs and defendant, is required.

[93]     Westland Aircraft Limited developed the Wessex helicopter.  Mr Lewis was working for the British Services as a test pilot when the Wessex Mk 1 (a single engine) helicopter designed for the Royal Navy was developed.  The Wessex Mk 2 was developed as a twin-engine version of the Wessex.  As the Wessex Mk 2 was made available to other air forces, it was given a distinct designation (for instance, Mk 52 in Iraq and Mk 53 in Brunei).  A civilian version of the Mk 2 (designated Mk 60) was also developed.   In the Lewis letter as typed, Mr Lewis refers to his experience with both the Mk 52 and the Mk 60.  The particular experience which Mr Lewis refers to with the Mk 52 and the Mk 60 spans from 1959 into the 1960s (hence the plaintiffs’ “40-year old experience” description.) The evidence of experts in this case indicates that the Wessex Mk 2 was relatively well-known.   But the existence of Wessex Mk 52 was not well-known, even to those with some detailed knowledge of helicopters.   This situation is explained by the fact that only a few Mk 52s were exported to Iraq.  Regardless of its notoriety, or lack thereof, it is clear on the evidence that the Mk 2 and the Mk 52 of the 1960s were materially the same aircraft.

[94]     The evidence establishes the Wessex Mk 2 has since been further developed. By 2005 it was a substantially different aircraft to that flown by Mr Lewis in the

1960s.  The plaintiffs’ experts (for instance, David Ward, an aeronautical engineer) accept that there would have been safety concerns about the Wessex Mk 2 (as it existed in the 1960s) if used for heli-logging in 2005.  Mr Ward accepts Mr Lewis’s identification (in the Lewis letter) of computer fuel and control systems which were susceptible  to  mis-management.     The  plaintiffs’  experts’  central  criticism  of Mr Lewis is captured in the evidence of Mr Ward when he deposed:

… Mr Lewis in his report somehow fails to make clear and distinguish between the Mark 2 prior to 1970 and the 2004 version of the Mark 2 which the plaintiffs sought to use for helilogging.

[95]     Another  way  of  stating  the  criticism  is,  as  the  plaintiffs  themselves complained after the Director’s declinature decision, that the Lewis letter was discussing “40-year old” technology.

[96]     Such a conclusion was drawn by the plaintiffs and their advisers on the face of the Lewis letter as attached to the Director’s declinature decision in August 2005. Whether the reference in the Lewis letter was to a Wessex Mk 52 or a Wessex Mk 2, the technology referred to was of precisely the same vintage.  As it is, the experts now establish that it was not only of the same vintage but of materially the same version of helicopter.

[97]     Against this background, I return to the alteration in the Lewis letter which made it appear that the “Mk 52” which Mr Lewis identified he had flown with the Iraqi Air Force was in fact a “Mk 2”.

[98]     Mr Lewis deposes that he does not recall requesting or authorising the change to be made (although he does not regard it as significant for the historical reasons relating to the Wessex Mk 2 which I have discussed above).   He deposes that he would not have had a problem if the reference to “Mk 52” had been changed to “Mk 2” for those reasons.  Accordingly, for Mr Lewis, any difference in reference to “Mk 2”of “Mk 52” was not material to the conclusions which he expressed as to safety.

[99]     For completeness I record that the CAA went further in relation to evidence than simply relying upon the documentary record.   It filed an affidavit of Sydney Wellik, a solicitor who was working for the CAA in 2005.  He produced a further copy of the Lewis letter.   He deposes that various handwritten notes on the letter must be his because they are in his handwriting (although he has no recollection of making the notes or alterations).  The exhibit contains the alteration of “viability” to “safety” which was on the copy subsequently sent to the plaintiffs.   Mr Wellik deposes that that particular alteration is in someone else’s handwriting.  The copy of the letter exhibited has an alteration whereby the “5” in the “Mk 52” reference is deleted by a handwritten oblique stroke similar to but more obvious than that in the copy of the letter sent to the plaintiffs.  Mr Wellik deposes that he must have made the change because he would have been discussing it with a technical person with the relevant aviation knowledge.

[100]   I turn then to consider materiality from the viewpoint of Mr Ford and his interests.  The alleged materiality is pleaded in the first amended statement of claim in terms of consequences.  The plaintiffs plead consequences at two levels, namely the consequences of the alteration on the plaintiffs’ knowledge and the consequences of the plaintiffs’ unawareness on their legal challenge.   In particular, the plaintiffs plead as to their knowledge as a consequence of the Mk 52/Mk 2 change:

(a)       they were unaware that Mr Lewis was actually discussing a non- existent or irrelevant Wessex version helicopter in the Lewis letter;

(b)as a consequence of the plaintiffs’ unawareness of the Mk 52/Mk 2 change:

(i)the plaintiffs’ funders withdrew their support to the legal challenge because Mr Lewis, as a purportedly independent expert, had advised the CAA that the Mk 2 helicopter was not safe;

(ii)the plaintiffs were consequently unable to pursue their legal challenge; and

(iii)the plaintiffs were misled as to the availability of grounds for challenge because Mr Lewis had been referring to the Mk 2

Wessex.

[101]   Mr Ford gives brief evidence which touches upon the consequences of the Mk 52/Mk 2 alteration.  It is contained in five paragraphs of his initial affidavit in opposition:

181.I did not notice the alteration to the Lewis letter at the time.  The focus  was  on  challenging  the  context  of  the  report  but  in  the mistaken belief that Mr Lewis was referring to the Mk 2 helicopter.

182.As I explain below I was not aware that there was even such a model as the Mk 52 in 2005, and so it did not occur to me that Mr Lewis was proceeding on a completely erroneous assumption.

…

192.     In or about early April 2012 my wife and I discovered the alteration.

As I have done over and over again since all this took place, one weekend I was pouring through all of the documents and looking at

the Lewis letter in dismay.  My wife Suzanne was sitting with me at the time to give me support.   It was then that she pointed out the

alteration to  me  that she thought  was  odd and the fact that  she

[thought] it looked like a 5 had been concealed.   She asked me if there was a Wessex Mark 52.  I did not know but immediately

researched this.

193.This was the first time this alteration was noticed by anybody. When I discovered what the Mark 52 was being a model of Wessex that went out of production in the 1960s in relation to which only a small number were ever manufactured, I immediately felt that this was the piece of the puzzle that had been missing and that the letter had been fraudulently altered.

194.At the time of receiving the letter in 2005, everyone was so focused on the change of the word “viability” to “safety” on the last page of the report that this went unnoticed.

[102]   Mr  Ford  gives  evidence  as  to  the  special  damages  suffered  by  the  first plaintiff through the CAA’s declinature of the applications.  He then deposes as to the extent that he and his wife had personally suffered in terms of both their health and their financial situations.   A later affidavit filed by Mr Ford did not further address these issues.

[103]  Accordingly, as the case in deceit stands, the plaintiffs, by their central allegations of “consequence” (or causation), implicitly allege that (through Mr Ford) they relied upon the apparent reference to a Wessex Mk 2 being indeed Mr Lewis’s reference to a Mk 2 (not a Mk 52).   Implicitly, they recognise that to succeed in deceit they need to show not only that there was a false representation which the CAA intended the defendants to rely upon, but also that they did act in reliance upon the representation.  Such are the ingredients of the tort of deceit as recognised by the

Court of Appeal in Amaltal Corporation Ltd v Maruha Corporation.11

[104]   In this case, the action allegedly taken in reliance by the plaintiffs is said to flow from their being “misled as to the availability of grounds for challenge to the CAA’s decision” and in particular the misrepresentation that the original Lewis letter referred to a Wessex Mk 2 helicopter.

[105]   A fundamental difficulty with the plaintiffs’ case is that Mr Ford’s evidence does not even arguably suggest that he conducted his affairs at the time in reliance upon a misrepresentation as to a “Mk 2”.  As I have noted, it is common to both parties’ cases, as presented in terms of the expert evidence, that the Wessex Mk 2 and Wessex Mk 52 were, at the time of Mr Lewis’s experience, essentially the same

aircraft.12    One consequence of a reference to a “Mk 52” would have been that, if

someone had investigated the reference to “Mk 52”, it would have been clear that the version in question belonged to an era 40 years earlier, and was essentially a Mk 2. The plaintiffs, following the declinature in August 2005, were soon made aware that Mr Lewis’s experience of the Wessex Mk 2 was “40 year old experience”.  Given the evidence as to the relationship between the Mk 2 and the Mk 52, the complaint which the plaintiffs would have made in relation to any experience Mr Lewis identified in relation to the Mk 52 would have been identical, namely that the Lewis letter was discussing “40-year old technology”.  Nothing turned or could have turned on the “difference” between a Mk 2 and a Mk 52.

[106]   In 2005, Mr Ford and his advisers clearly identified what they perceived as the critical weakness in the Lewis letter, through their “40 year old technology”

11     Amaltal Corporation Ltd v Maruha Corporation [2007] 1 NZLR 608 (CA) at [46]-[55].

12     Above at [93] – [96].

criticism.   It was a criticism which would have applied whether Mr Lewis’s letter referred to his experience as being on the Wessex Mk 2 or the Wessex Mk 52.  The information provided them with the knowledge and determination to pursue judicial relief.    To  do  that,  they  needed  time  and  financial  support  from  their  secured creditors which they initially obtained but was subsequently withdrawn.  As I come to (below at [119], their inability to pursue judicial review at the time was caused by the withdrawal of financial support by others.  It was not because the plaintiffs had relied on something apparently stated in the Lewis letter with a consequence that (as their statement of claim alleges) they were “misled as to the availability of grounds for challenge to the CAA’s decision”.

Causation of damage

[107]   Having  found  that  the  plaintiffs’  allegation  of  material  reliance  cannot succeed, I turn briefly to the evidence relating to the proposition that the CAA caused the plaintiffs’ losses.

[108]   The allegation in the statement of claim which particularly identifies the

plaintiffs’ causation argument in relation to the financier’s funding reads:

70.As a further consequence of the alterations to the Lewis letter and/or the failure to provide the plaintiffs with the actual copy of the letter provided  to  the  CAA at  the  time  of  declining  the  petitions  and application:

(a)       The  plaintiffs’ funders  withdrew  their  support  to  a  legal challenge   to   the   CAA’s   declinature   of   the   petition application  because  the  purportedly  independent  expert Mr Lewis  had  advised  the  CAA that  the  Wessex  MK  2 helicopter was not safe.

(b)       The plaintiffs were consequently unable to mount a legal challenge to the decisions of the CAA.

…

[109] As the earlier background narrative indicates, the issue of causation is complicated   by   the   fact   that   Helilogging’s   receivership   and   its   financial circumstances generally meant that the Fords were dependent on outside financiers to provide the support and finance for Helilogging’s litigation against the CAA.  The plaintiffs’ pleadings (including the amended claim) do not identify the factual links

in the causation argument.  Rather, the plaintiffs plead simply that they have suffered

their particularised losses “as a consequence of the defendants’ conduct”.

[110]   I have noted, as a peculiar feature of Mr Ford’s initial evidence, that he did not identify why Helilogging did not pursue a judicial review following the declinature decisions.  Nor did he refer to his discussions or agreements reached with the receivers or Helilogging’s financiers about challenging the Director’s decisions.13

[111]   In  the  plaintiffs’ initial  evidence,  the  role  played  by  the  financiers  was therefore limited to what Mr Haydon deposed.  Mr Haydon at that point referred to Mr Ford  approaching  him  concerning  the  August  2005  declinature  decision. Mr Haydon considered that the CAA would have acted in the manner expected of a statutory body.  In particular he deposed:

16.I also concluded that if the CAA had safety concerns there was little prospect of the exemptions being granted.

17.I assumed that the CAA report would be professionally prepared and that there would have been a proper process taking into account all of the relevant evidence, and that Mr Ford would have been given every opportunity to comment.

18.I believe around this time I also spoke to Mr Miller who was a director of LDC, another financier with whom the plaintiffs were involved.

19.Mr Ford and Mr Miller invited me to a meeting to discuss the way forward after the CAA decision had been released.  In particular they said they wanted to discuss my funding application for a Judicial review.

20.I advised Mr Miller and Mr Ford that I had no interest in such an approach, and nor in funding further litigation, and because the application had been declined for safety reasons.  I said that even if the CAA had not followed a fair process the Court was hardly likely to reverse a decision based on safety, and in any event the CAA was hardly likely to change its mind on an issue which was of such importance.

21.As a consequence CFL decided to exercise the legal remedies that were available to it in respect of Mr Ford’s companies.

[112]   Shortly thereafter, Mr Haydon’s company appointed receivers to Helilogging.

In his initial evidence Mr Haydon then refers to a settlement package being later

13 Above at [47].

negotiated  between  his  company,  the receivers  and  Mr Ford  in  June 2008.    He deposed, “Mark [Ford] continued to seek funds for a Judicial Review, but I would not agree, and for the reasons set out above”.

[113]   In summary, the plaintiffs’ case was and remains that Helilogging was unable to fund its intended litigation because of Mr Haydon’s position.  The directors then lost control through the receivership.   It was explained that Mr Haydon had no interest in funding Helilogging’s litigation because he took the view that a challenge on safety grounds was unlikely to succeed.

[114]   Understandably  Mr  Taylor,  for  the  CAA,  when  faced  with  the  Haydon evidence did not, in his synopsis for the hearing, submit (other than in relation to reliance) that the plaintiffs had not established an arguable case of causation.

[115]   However, the evidence now before the Court puts a different light on the discussions and agreements reached between the plaintiffs and Mr Haydon.  I have summarised above at [44] to [64] the additional evidence which came before the Court following the hearing, together with the submissions of counsel.

[116]   Mr Haydon’s initial evidence had identified a June 2008 settlement package negotiated  between  his  company,  the  receivers  and  Mr  Ford  and  that  he  had continued to refuse to fund judicial review proceedings.   But the evidence now establishes that Mr Haydon’s company and the Ford entities concluded an earlier agreement on 15 March 2007 whereby financiers (albeit not Mr Ford’s company) undertook to provide finance up to a maximum of $150,000 for the intended judicial review proceeding.

[117]   The receiver’s third report (quoted above at [44]) records that the receivers terminated the 15 March 2007 agreement “as a result of continued and longstanding breaches of disclosure” and the failure of Mr Ford to fully co-operate.

[118]   Mr Haydon, in supplementary evidence filed, deposes that his position had never  changed,  namely  that  the  proceeding  was  doomed  to  fail  because  of  the

Director’s safety reasons for declinature.  Mr Haydon deposes that for that reason he

did not support the judicial review.

[119]   It is now beyond argument that the plaintiffs secured from their financiers agreements which provided funding and time precisely to allow them to pursue the judicial review proceeding.  At that point Mr Haydon’s views as to the likelihood of success  are  no  longer  material.    The  15  March  2007  funding  agreement  was cancelled six months later, not by reason of any view taken of the Lewis letter or the Director’s grounds for declinature.   It was cancelled because, as the receivers reported, there had been continued and longstanding breaches of disclosure by the plaintiffs and a lack of full co-operation on the part of Mr Ford in particular.  It was that conduct of the plaintiffs and not a view of the strength or weakness of the judicial review proceeding which led to the plaintiffs’ inability to pursue the judicial review.

[120]   On this ground alone the plaintiffs’ tort claims cannot succeed under the law.

Bases of plaintiffs’ allegations of fraudulent conduct

[121]   By reason of the conclusions I have reached, in relation to the plaintiffs’ deceit claims, it is unnecessary that I rule on an alternative submissions, extensively developed by Mr Taylor for the CAA.   Mr Taylor submitted that there was no credible basis for the plaintiffs’ allegation that the CAA had acted fraudulently in presenting the Lewis letter with the “viability/safety” alteration and the “Mk 52/Mk

2” alteration.   By reason of a lack of proper particularisation of the allegation of fraud in the amended statement of claim, I directed in the course of the hearing the provision of further particulars of the relevant pleading.   I recognise the force in Mr Taylor’s  submissions  that,  even  taking  into  account  the  further  particulars provided in relation to fraud allegation, there is a distinct lack of evidence to support an inference of fraud.

[122]   The judgment of the majority in the Supreme Court in Z v Dental Complaints Assessment Committee confirms that, while the civil standard of proof continues to apply in relation to cause of action involving serious allegations, the Court accommodates the seriousness of the allegations “through the natural tendency to

require  stronger  evidence  before  being  satisfied  to  the  balance  of  probability

standard”.14

[123]   In  the  event,  it  is  unnecessary  to  determine  the  defendant’s  summary judgment application by reference to this alternative ground of application and I do not do so.

Conclusion as to the elements of the tort of deceit

[124]   The plaintiffs say the CAA’s conduct in relation to the two alterations to the Lewis letter constituted deceit.   However, they are unable to point to any material reliance by them upon the representation that Mr Lewis had flown a Wessex Mk 2 rather than a Wessex Mk 52.   The claim must fail by reason of the lack of that element of the deceit cause of action.  In relation to the alteration in the Lewis letter of “viability” to “safety”, the plaintiffs cannot, on the evidence, point to an arguable misrepresentation. The alteration was plain to see and was authorised by Mr Lewis.

[125]   It  is  therefore  unnecessary  to  explore  further  Mr  Taylor’s  alternative submission to the effect that the plaintiffs did not alter their conduct in reliance on the viability/safety alteration.   Similarly, as explained, I have not had the need to consider further the alternative submission as to a lack of credible evidence as to fraud. The plaintiffs’ cause of action in deceit cannot succeed.

Cause of action in negligent misstatement

[126]   The tort of breach of duty of care through negligent misstatement shares with the tort of deceit the elements of a misrepresentation and action by the claimant in reliance on the representation.   Predictably, in relation to those elements, the plaintiffs’ pleadings are materially identical.

[127]   My analysis in relation to the deceit cause of action applies.  The plaintiffs cannot succeed on the negligent misstatement cause of action.

Cause of action in misfeasance in public office

The nature and elements of the tort

[128]   The Court of Appeal considered the tort of misfeasance in public office in Commissioner  of  Inland  Revenue  v  Chesterfields  Preschools  Ltd.15    The  New Zealand Law Report headnote accurately summarises the Court’s conclusions as to the elements of the tort:16

(iii) The elements of the tort of misfeasance in public office encompass two discrete forms of liability with regards to the mental element: targeted and non-targeted malice. Both involve subjective bad faith: targeted malice requires the public officer to have specifically intended to injure a person or persons; non-targeted malice involves bad faith in that the public officer does not believe that his or her act is lawful. The elements of the tort are therefore:  (a)  the  defendant  was  a  public  officer;  and  (b) the  defendant purported to exercise powers of his or her office; and (c) the defendant either (i) acted in bad faith; that is, for an ulterior motive with intent to injure another (targeted malice); or (ii) knew they were acting outside the scope of the power conferred, or were recklessly indifferent, and that this was likely to injure the plaintiff (non-targeted malice); and (d) this caused damage to the plaintiff.  The policy behind the tort of misfeasance in public office is that, in a legal system based on the rule of law, executive or administrative power may be exercised only for the public good and not for ulterior or improper purposes

[129]   In Chesterfields, the Court adopted, in relation to the policy considerations behind the tort of misfeasance in public office, observations the Court had earlier made in Garrett v Attorney-General.17    In Garrett, Blanchard J, delivering the judgment of a five-Judge Bench, reviewed Commonwealth authority.   His Honour concluded as to policy matters:18

The purpose behind the imposition of this form of tortious liability is to prevent the deliberate injuring of members of the public by deliberate disregard of official duty. It is unnecessary, to attain this objective, to extend the tort to catch an act which, though known to be wrongful, is done without a realisation of the consequences for the plaintiff …

In our view this intentional tort should not be allowed to overflow its banks and cover the unintentional infliction of damage. In many cases the consequences of breaking the law will be obvious enough to officials, who can then be taken to have intended the damage they caused. But where at the

15     Commissioner of  Inland Revenue v  Chesterfields Preschools Ltd  [2013] NZCA 53, [2013]

2 NZLR 679.

16     At 681 (drawn from the judgment at [40]–[45]).

17     Garrett v Attorney-General [1997] 2 NZLR 332 (CA).

18     At 350.

time they do not realise the consequences they will probably not be deterred from exceeding their powers by any enlargement of the tort.

[130]   Against that policy background, I turn to consider the plaintiffs’ case and evidence in relation to the tort.

The impugned decision of the public officer

[131]   The exemption power under s 37 of the CA Act lies with the Director.19

While the plaintiffs’ claim is at present against the CAA rather than the Director, Mr Taylor for the CAA accepted (but only for the purposes of the present argument) that the Director, in declining the exemption applications, was a public officer and that the CAA was vicariously liable for his acts.

[132]   The exercise of power impugned by the plaintiffs is the Director’s decision to

decline the exemption applications.

Element of knowledge and/or intention

[133]   The plaintiffs plead as to the Director’s state of mind:

Mr Jones was aware of all or any of the following facts:

(a)       That he was in breach of the seven-stage process by engaging Mr Lewis and not making the Lewis report available to the plaintiffs prior to making his final determination.

(b)      That  he  had  determined  prior  to  completion  of  the  seven-stage

process to decline the plaintiffs’ application.

(c)       That the Lewis letter had been altered in material respects at the instigation of the defendant or the defendant’s agent by both altering the word “viability” to “safety” and deleting the number 5 before the description Mk 52,

(d)       Withholding a copy of the unaltered letter from the plaintiff save in respect of the alteration of the word “viability” to “safety”.

(e)       Engaging Mr Lewis as an expert when he was already aware that Mr Lewis had been consulted by the plaintiff and to whom a fiduciary obligation of confidentiality already existed.

(“the subjective particulars”)

Discussion – subjective particulars (a) and (b)

[134]   The plaintiffs’ subjective particulars (a) and (b) ([133] above) assert that the Director was aware that he was in breach of the seven-stage process (through the process  of engaging Mr  Lewis  and  obtaining and  using his  letter) and  that  the Director had pre-determined the declinature decision.

[135]   Mr Taylor submitted that in relation to these subjective particulars generally, the notable feature of the plaintiffs’ amended pleading is an absence of any allegation that the Director intended to harm the defendants.  The way in which Mr Taylor put that submission reflected the first limb of the “intention” element as identified by the Court of Appeal in Chesterfields, namely the concept of targeted malice where the

public officer has acted in bad faith.20   Mr Dale emphasised that the plaintiffs relied

also on the assertion in the earlier part of their pleading of deceit in which they allege that the defendant acted fraudulently and without honest belief in the accuracy or truth of the altered Lewis letter.  I will return shortly to consider that pleading in the context of the misfeasance cause of action.  The plaintiffs’ misfeasance pleading, in particular with its allegation of the Director’s “awareness” might also be related to the second intention limb under Chesterfields (non-targeted malice), relying both on the proposition that the Director knew that he was acting outside the scope the power conferred or was recklessly indifferent (when injury to the plaintiff was likely to result).

[136]   The subjective particulars (a) and (b) are not pleaded by the plaintiffs in terms of targeted malice.  The earlier pleading of fraud (under the heading of deceit) relied upon  by Mr Dale  asserts  that  state of knowledge only in  relation  to  the changes to the Lewis letter.  Having regard to the seriousness of such an allegation I am not prepared to infer that the plaintiffs may have intended to allege bad faith in relation to other aspects of the Director’s or the CAA’s conduct.

[137]   That leaves non-targeted malice.  I must ask myself whether it is arguable on the evidence that the Director must have known he was acting outside the scope of his exemption powers or was recklessly indifferent, with that conduct likely to injure

the  plaintiffs.    Mr  Taylor  did  not  address  submissions  focused  on  non-targeted malice, focusing instead on the lack of a pleading of any intentional harm.

[138]   If the plaintiffs’ somewhat inelegant pleading is taken to imply non-targeted malice, in my judgment it is viable as a pleading on a strike-out application and, in a summary judgment context, not capable of dismissal as unarguable.  Mr Dale’s case is that there are inferences to be drawn as to the Director’s knowledge and pre- determination which at least call for cross-examination.

[139]   These observations made, there is nevertheless a fundamental difficulty with the plaintiffs’ misfeasance claim to the extent it relies on particulars (a) and (b).  It lies in the limitation period.  The plaintiffs received the copy of the Lewis letter with the Director’s declinature letter on 19 August 2005.21    At that point the plaintiffs were in a position to fully assess the Lewis letter and the extent to which it involved a departure from the seven-stage process.  In the following period, Mr Ford and his associated entities carefully reviewed the interview and considered their legal remedies.  In March 2006, Helilogging filed its appeal against the prohibition order issued by the Director that month.22   The process of Helilogging’s review culminated in its 16 page letter to the Director on 21 July 2006 concerning four outstanding issues,  including  the  19 August  2005  declinature.23    In  that  letter  Helilogging (through Mr Ford) clearly identified issues arising from the Lewis letter.   These included  both  the  absence  of  an  opportunity  for  Helilogging  to  respond  to Mr Lewis’s concerns before the Director’s decision was made (that or a breach of the seven- stage process) and the apparent predetermination of the CAA (to decline the exemption applications).

[140]   Accordingly, by 21 July 2006 at the latest, the plaintiffs were aware of and were expressing the complaints identified in particulars (a) and (b).  Any cause of action in misfeasance based on particulars (a) and (b) accrued with the making of the Director’s declinature decisions on 19 August 2005, with the consequence that the

applicable limitation period in that regard expired on 19 August 2011.24   There is no

21 Above at [23].

22 At [36].

23     At [37] – [41].

24     Limitation Act 1950, s 4(1)(a).

ground  for  asserting  that  the  limitation  period  was  postponed  pursuant  to  s  28

Limitation Act 1950 whether by fraudulent concealment or mistake – the cause of action was, beyond argument, known to the plaintiffs by August 2011.

Particulars (c) and (d)

[141]   Contained in the plaintiffs’ particulars (c) and (d) ([133] above) is the three- fold allegation in relation to the Lewis letter that:

(a)       the alterations of “viability” to “safety” and of “MK 52” to “MK 2”

were material;  and

(b)      the alterations were effected at the instigation  of the  CAA or the

CAA’s agents;  and

(c)       the material alterations were known to the Director.

[142]   I have above at [87] to [89] reviewed the evidence in relation to the alteration of “viability” to “safety”.  The contemporary documentary evidence, and Mr Lewis’s evidence in this proceeding, confirms that the amendment took place at Mr Lewis’s direction.  The amendment to “safety” fits with the earlier observations in the Lewis letter.  It is not arguable that any understanding on the part of the Director as to the alteration of the Lewis letter could lead to a finding of misfeasance concerning that alteration.

[143]   I  have  also  reviewed  above  at  [90]  to  [96]  the  issue  in  relation  to  the alteration of “Mk 52” to “Mk 2”.  The plaintiffs’ argument that the Mk 52 alteration is material fails for the reasons I have identified.  These include that the Mk 2 and Mk  52  of  the  1960s  were  materially the  same  aircraft.    On  that  evidence,  the plaintiffs’ case of misfeasance, pursuant to particulars (c) and (d), does not pass the summary judgment (arguability) test.

[144]   Given this finding, it is unnecessary that I determine whether the evidence given by the CAA solicitor, Mr Wellik, as to the Mk 52 alteration renders unarguable

the misfeasance claim based on the Mk 52 alteration.25    I incline to the view that Mr Wellik’s evidence so decisively, and with inherent plausibility, identifies from contemporary records the good faith nature of the alteration that it renders a misfeasance cause of action based on particulars (c) and (d) untenable.   But the misfeasance claim based on the Mk 52 alteration fails in any event for lack of materiality of the alteration.

[145]  As with particulars (c) and (d) (above at [133]) there is no ground for postponement  of the limitation  period  on  grounds  of fraudulent  concealment  or mistake, as the cause of action was known to the plaintiffs by August 2011.

Particular (e)

[146]   By particular (e) ([133] above), the plaintiffs introduced a fresh allegation to the pleading.  The assertion is that the Director engaged Mr Lewis as an expert when the Director was aware that Mr Lewis had been consulted by the plaintiffs and owed a fiduciary obligation of confidentiality to the plaintiffs.

[147]   By his affidavit in opposition, Mr Ford gave some evidence to explain the pleaded breach of fiduciary obligation. He exhibited an email dated 19 May 2005 which  he  received  from  Mr  Barclay.    Mr  Barclay  in  his  email  explained  that Mr Lewis had popped in to see him that day; he and Mr Lewis had overlapped at the CAA many years ago; Mr Lewis was a “very experienced and respected helicopter [test] pilot and was involved in the early Wessex development work”; Mr Lewis was still passionate about the Wessex; and Mr Lewis still did the odd bit of expert advice “which may be why the CAA had sent him a copy of my latest report”.  Mr Barclay stated that Mr Lewis had described the Barclay Report as superb which might mean that the CAA would not contact Mr Lewis again.   Mr Barclay recorded that he showed Mr Lewis some of the key documents and gave him copies to take away, and that Mr Lewis would no doubt contact him in due course with his thoughts.

[148]   Mr Ford deposes that Mr Lewis was never formally engaged by Helilogging to assist.   He does not refer to any communication by which he or Helilogging

25 Above at [99].

informed the Director of their contact with Mr Lewis (at whatever informal level it existed).

[149]   On this basis there is no evidence to support the allegation that Mr Lewis owed a fiduciary duty to Helilogging (by some form of professional engagement) let alone that the Director was aware of the fiduciary duty or engaged Mr Lewis in the knowledge that Mr Lewis would be engaged in breach of a duty to Helilogging.  The misfeasance cause of action to the extent it is dependent on particular (e) is not arguable.

[150]   There is also a limitation bar in relation to particular (e).  If Mr Lewis had owed to Helilogging a disqualifying fiduciary duty, those best placed to identify it were the personnel at Helilogging and their advisors.  Such relationship as may have been formed between Helilogging and Mr Lewis would have come into existence around 19 May 2005, the day of the Lewis/Barclay meeting.  Any cause of action which relied upon the Director’s knowledge of a breach of duty by Mr Lewis, accrued on 19 August 2005, when the Director sent the declinature letter.  The action became statute barred six years later.

Overall conclusion

[151]   As the defendant is entitled to succeed on its summary judgment application, I do not further consider the strike-out application.

[152]   Costs  would  normally  follow  the  event.    A  2B  approach  may  not  be appropriate.  I will therefore reserve all issues as to costs for agreement between the parties or, failing that, submissions and a determination on the papers.

Orders

[153]   I order:

(a)       There is judgment for the defendant against the plaintiffs.

(b)Costs  are  reserved  –  in  the  event  of  disagreement  as  to  costs, submissions (five page maximum) are to be filed, defendant first and plaintiffs within five working days thereafter.

Associate Judge Osborne

Solicitors:

McVeagh Fleming, Wellington
Neilsons Lawyers Ltd, Auckland

Counsel: P J Dale, Auckland

Darroch Forrest Lawyers, Wellington
Counsel: L Taylor QC, Wellington

SCHEDULE 1