Pharmacy Care Systems Limited v Attorney-General HC Auckland Cp96-Im00

[2002] NZHC 48

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY CP96-IM00

BETWEEN PHARMACY CARE SYSTEMS LIMITED
Plaintiff

AND THE ATTORNEY-GENERAL
Defendant

Hearing: 7 February 2002

Appearances: B O’Callahan for Plaintiff
R Burns for Defendant

Judgment: 7 February 2002

ORAL JUDGMENT OF MORRIS J

Solicitors:
Carter & Partners, PO Box 2137, Auckland for Plaintiff
Meredith Connell, Auckland for Defendant

[1] Pharmacy Care Systems Limited has issued proceedings against The Attorney-General, I think, on behalf of the former Health Funding Authority seeking payment of $80,000.00 withheld from it by that Authority together with damages for harm done to its business and exemplary damages plus interest and costs.

[2] The proceedings have already come before this Court and the Court of Appeal. An application to strike out the Pharmacy’s claim was upheld by the Master and subsequently by Robertson J. but an appeal by the Pharmacy was allowed by the Court of Appeal. The history of the matter and the basis of the claims are set out in detail in the Judgment of the Court of Appeal delivered on 11 October 2001 and I do not intend to repeat it in this ruling.

[3] The Attorney-General seeks an order under R 418 of the High Court Rules for the decision of a question separately from any other question before the trial in this proceeding, namely:

“Whether the settlement deed dated 6 September 1996 and signed by both parties to this proceeding is valid”.

The application is made upon the grounds that the question can be easily severed from any other issues that will arise at trial and it is appropriate for the question to be decided prior to trial.

[4] The application is opposed. The grounds of opposition are contained in a notice dated 5 December 2001. Essentially it is contended that the evidence on the question in respect of the deed is not in all respects severable from the evidence on the other substantive claims, the determination of the preliminary point will result in further delay in resolving the proceedings even if it be decided in favour of the Attorney-General because there are two other causes of action, namely the alleged damages flowing from the non receipt of the $80,000.00 and the question of high handed conduct entitling Pharmacy Care to damages; and thirdly, there is no evidence to support the allegation that the ordering of a preliminary question to be heard is likely to expedite the proceeding, save inconvenience and expense and overall justice requires all three matters to be heard together.

[5] The principles applicable to an application of this nature are set out in McGechan HR 418.04. The criteria was discussed by Barker J in Rio Beverages Limited v The Golden Circle Cannery [1992] BCL 569 and are as follows:

“(a) Delay in finally resolving the proceeding;

(b) Length of the hearing of the preliminary question;

(c) Whether a decision one way or the other would result in the end of the litigation;

(d) Length of any subsequent hearing and in particular whether any subsequent hearing time would be shortened by a preliminary question; and

(e) A balancing of the advantages to the parties and the public interest in shortening litigation as against any disadvantages asserted by the defendant. The principal criteria will be reference to the underlying purpose of the Rules concerned, namely whether the procedure is likely to expedite a proceeding, saving inconvenience and expense without any countervailing injustice.”

[6] It is not necessary for the granting of any such application as the present that the decision which will be first determined must finally dispose of the overall proceedings. The primary purpose of the procedure is to shorten trials. I therefore turn to consider whether this would occur should I grant this application and whether or not it is in the overall interests of justice I grant it.

[7] I have no doubt at all the determination of this question will result and indeed must result in a shortening of the Court hearings and will expedite finalisation of this action. I accept in the event of the defendant’s contention vis-à-vis the Deed being accepted, this will not end the matter and evidence may well have to be heard in respect of the two other causes of action, although I find it difficult to see what evidence there would be in respect of the second cause, namely the loss of profits and damages flowing from the non receipt of the $80,000.00 if the holding back of the $80,000.00 was held to be valid. Clearly, however, in the event of the defendant’s contention not being upheld and the Deed being voidable or unenforceable, this could well lead in my view to some sensible settlement being achieved and I think this is the kind of matter the Court is entitled to take into account in determining whether to order a preliminary issue to be tried under this rule.

[8] Having regard to the situation I am satisfied the interests of justice necessitate the making of this order and the order is accordingly made as requested.

[9] Costs reserved.