McDonald v FAI (NZ) General Insurance Company Limited HC Auckland CP507/96

[2001] NZHC 331

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY CP507/96

BETWEEN ROBERT McDONALD
Plaintiff

AND FAI (NZ) GENERAL INSURANCE COMPANY LIMITED
First Defendant

NEW ZEALAND LAW SOCIETY
Second Defendant

Hearing: 9 February 2001

Counsel: M C Black for Plaintiff
P N Collins for Defendants

Judgment: 3 May 2001

JUDGMENT (No 3) OF RODNEY HANSEN J

[1] The second defendant (“the Society”) applies to recall my judgment of 9 April 2001 in which I quantified the interest payable to the plaintiff in accordance with interest rates fixed by the Court of Appeal and in my judgment of 14 February 2001.

Background

[2] Before the hearing the plaintiff and the Society had each filed memoranda setting out their respective calculations of the sum payable. Each was supported by a schedule prepared by an accountant detailing the way in which the sum payable had been determined. According to the plaintiff’s calculation, the sum payable was $121,134.75. The Society’s figure was $116,309.56. However, as recorded in my judgment, for the sake of bringing finality to the proceeding, the Society said it was willing to accept the plaintiff’s figure and for an order to be made by consent in the sum calculated by the plaintiff.

[3] At the hearing I drew Mr Collins’ attention to an apparent arithmetical error in the Society’s calculation. The figures set out in the summary page did not add up to the sum which the Society had relied on in calculating its figure of $116,309.56. They produced instead a figure of $127,745.26. After taking a little time to check the figures, Mr Collins confirmed that there indeed appeared to have been an error. In the circumstances, he did not object to judgment being entered for the higher figure. As this exceeded the sum which the plaintiff had calculated to be payable, he did not object to that outcome, save for expressing concern on one matter which I dealt with in my judgment and which is no longer in issue.

Application to recall

[4] After the delivery of my judgment, the Society realised that the error was not, as had been assumed at the hearing, in the addition of the figures on the summary page. It had arisen as a result of the inclusion in error of a figure of $24,477.47 in the summary page. On the Society’s methodology, the calculation of the interest payable as $116,309.56 was in fact correct. The Society then applied to recall the judgment to substitute the figure of $121,134.75 calculated by the plaintiff.

[5] The application to recall the judgment is made under r 540(6) of the High Court Rules. The principles on which the discretion to recall should be exercised are well established. The applicant relies on the third ground identified in Horowhenua County v Nash (No 2) [1968] NZLR 632, namely that for sonic very special reason justice requires that the judgment be recalled.

[6] In opposition to the application, Mr Black drew attention to what he submitted to be other arithmetic and methodological errors in the Society’s calculations. He said that if the Society were to be permitted to address an error in its approach at the earlier hearing, it should be open to the plaintiff to explore other sources of error. He submitted also that the error was “insufficient” to warrant the application of the rule.

[7] I am satisfied that it is in the interests of justice that the judgment be recalled. The Society’s agreement to judgment being entered for a sum greater than either party had initially contended for was the result of a demonstrably erroneous view, reached under some pressure in the course of the hearing, that its original calculation was mistaken. A consent order made in such circumstances would be set aside: see Bullivant v ENZA Limited [2001] 1 NZLR 498. I see no reason why the interests of justice should not require the same outcome in the circumstances of this case.

[8] Mr Black’s criticisms of the Society’s calculations seem to me to be irrelevant to the issue as the disclosure of the error means there is no longer any need to rely on its calculations. As was its position at the earlier hearing, the Society is content for the plaintiff’s calculation to be adopted and I see no reason why judgment should not be entered for the amount the he calculates as payable.

[9] Accordingly, I recall my judgment of 9 April 2001 and enter judgment for the plaintiff for the balance of interest payable in the sum of $121,134.97.

[10] On behalf of the plaintiff, Mr Black suggested that costs in relation to the interest issue should be deal with separately but I see no reason why all outstanding costs issues should not be dealt with at once. The plaintiff is to file his memorandum within twenty-one days and the Society within a further fourteen days.