Philip Moore & Co Limited v Surridge

[2018] NZHC 172

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE

CIV-2016-485-735

[2018] NZHC 172

IN THE MATTER OF

General Civil Proceedings

BETWEEN

PHILIP MOORE & CO LIMITED

Plaintiff

AND

ANNE JOSEPHINE SURRIDGE

Defendant

Hearing:

On the papers

Counsel:

S Iorns for Plaintiff

D Grove for Defendant

Judgment:

16 February 2018

JUDGMENT OF CHURCHMAN J

Introduction

[1]    The parties have applied to file further evidence and submissions after the closing of the hearing. The principal reason for this is because the plaintiff, at the hearing, did not file adequate evidence to prove its loss.

[2]    It is also alleged by the defendant that Ms Pearson the principal witness for the plaintiff, fabricated evidence of the plaintiff’s losses. The plaintiff submits that the further evidence will satisfy the Court that the calculations she made were not fabricated but were reasonably based and accurate.

PHILIP MOORE & CO LIMITED v SURRIDGE [2018] NZHC 172 [16 February 2018]

Submissions

Affidavit from Mr Frittoli

[3]    The defendant filed a memorandum on 27 November 2017 regarding a possible affidavit by Mr Frittoli in which he would simply annex an email (along with an attachment) he received from Ms Pearson on 11 October 2016. Mr Frittoli was unavailable to swear the affidavit until he returned to Italy on 9 December 2017.

[4]    The plaintiff filed a memorandum on 27 November 2017, stating that they did not oppose the defendant’s request for further time to file an affidavit of Mr Frittoli, provided it was limited to the point indicated in the memorandum (being the annexure of an email along with an attachment from Ms Pearson).

Affidavits relating to evidence of loss

[5]    The  plaintiff  filed  a  memorandum   dated  6   December  2017  (received   7 December), noting that the defendant was seeking to adduce further evidence post- trial. The plaintiff stated that they consented to that application, provided their response by way of affidavit evidence from three witnesses was also accepted. Those three witnesses are Mr David Ingram, Mr James Cooper and Ms Marion Pearson.

[6]    The plaintiff submits that the evidence from those three witnesses will satisfy the court that the calculations made by Ms Pearson of the loss suffered by the plaintiff were not fabricated as alleged but were reasonably based, accurate and less than the actual loss.

[7]    The plaintiff concedes that there was a minor error in the plaintiff’s pleadings, in that the losses claimed were the difference between cost price and price paid rather than lost profits. It became a situation of lost profits instead of excessive price, however, with Ms Pearson explaining at [12] of her affidavit that:

When we filed this part of the claim, the advice I received was to just keep buying Ghibli products through PMA so the difference in prices could be claimed. We could not follow that advice, though, as the supply was not forthcoming, and the prices charged left next to no profit margin at all.

[8]    The plaintiff submits that correcting this minor error, with the benefit of the evidence now available, is preferable to adding a fresh cause of action to cure a potential evidential deficiency.

[9]    The defendant filed a memorandum on 20 December 2017 in response to the plaintiff’s memorandum of 6 December 2017. Affidavits were also filed in reply to those filed by the plaintiff on 6 December.

[10]   The defendant submits that the affidavits filed on behalf of the plaintiff do nothing to assist in responding to the allegation that Ms Pearson’s evidence was fabricated. They also fail to identify the basis upon which the damages claim was prepared.

[11]   The defendant further submits that the plaintiff’s assertion that an order was made but never received is incorrect. Annexed to Mr Sebastian’s affidavit is correspondence regarding the order, the invoices that were paid, and the confirmation from the couriers as to delivery.

[12]   The defendant maintains its assertion that Ms Pearson fabricated page 107 of the Common Bundle so as to inflate the alleged loss.

Law

[13]   Section 98 of the Evidence Act 2006 deals with filing further evidence after the closing of a hearing:

98     Further evidence after closure of case

(1)In any proceeding, a party may not offer further evidence after closing that party's case, except with the permission of the Judge.

(2)In a civil proceeding, the Judge may not grant permission under subsection (1) if any unfairness caused to any other party by the granting of permission cannot be remedied by an adjournment or an award of costs, or both.

…

(5)The Judge may grant permission under subsection (1),—

(a)      if there is a jury, at any time until the jury retires to consider its verdict:

(b)      in any other proceeding, at any time until judgment is delivered

[14]   The following summary of the relevant common law principles were provided in Equiticorp Industries Group Ltd (In Statutory Management) v Hawkins:1

(1)The discretion should be exercised sparingly once the cases on both sides have closed and leave should only be given in exceptional circumstances.

(2)Only if the failure to call evidence at the proper time is adequately explained should the discretion be exercised.

(3)The justice of the case must require the admission of the additional evidence. …

(4)Leave will be refused if the witness (evidence) would have been available had due diligence been exercised.

(5)If the party is taken by surprise, leave will be more readily granted; and

(6)The distinction between a failure to tender evidence, and an election not to, can be important.

[15]   In Antons Trawling Ltd v Dawson & Associates Ltd,2 Brown J added to the principles set out in Equiticorp Industries, above, the following criteria stated by Tipping J in Savill v Chase Holdings (Wellington) Ltd:3

(1)Court should consider whether the new evidence could with reasonable diligence have been adduced at the trial or whether the party seeking to adduce the further evidence has shown on a reasonable basis that he did not earlier appreciate its significance…

(2)The Court should consider whether the new evidence is such as will either (a) be conclusive of the case; or (b) at least be likely to have a substantial bearing on a central issue.

(3)The Court should consider from the nature of the new evidence sought to be adduced how credible and reliable it is likely to be.

1      Equiticorp Industries Group Ltd (In Statutory Management) v Hawkins [1996] 2 NZLR 82, (1995) 9 PRNZ 313 (HC) at 85, 315, cited in Jackson v Te Rangi [2014] NZHC 2918, [2015] 2 NZLR 351 at [113].

2      Antons Trawling Ltd v Dawson & Associates Ltd [2016] NZHC 980, (2016) 23 PRNZ 255.

3      Savill v Chase Holdings (Wellington) Ltd [1989] 1 NZLR 257 (HC) at 291–292.

Analysis

[16]   A number of exhibits were annexed to the affidavit of Ms Pearson that sought to prove the plaintiff’s losses.

[17]   The plaintiff’s losses are alleged to flow from two orders. The first order, exhibit MJP1-1, was an order sent direct to Ghibli in October 2016 as the plaintiff was unable to get the stock needed from Philip Moore (Auckland) Ltd (“PMA”). This spreadsheet only gives the quantities of products ordered; no prices are given.

[18]   Annexed to the affidavit of David Ingram is exhibit DKI1-1. This was an order placed in July 2015, again just giving quantities. Exhibit DKI1.2 is a screenshot confirming that this Excel document was  last  modified  on  10  December  2015. Ms Pearson claimed this order never arrived.

[19]   However, the affidavit of Mr Sebastian contradicts this assertion. He says the order was placed on 16 July 2015 and has annexed to  his affidavit an email from  Mr Ingram which indicates that an email with an attachment was sent to Mr Sebastian on 16 July 2015. He replied to that email on 9 December 2015, asking for a breakdown of this order so that he could send it to Christchurch if Mr Ingram wanted. Mr Ingram replied to that email on 10 December, attaching a document entitled ‘Ghibli: order July 2015’.

[20]   Mr Sebastian stated this order was then delivered in the same manner as in the past, some to Christchurch and some to the premises from which Kyle operates in Otaki. He also annexed to his affidavit tax invoices for the products ordered and confirmation from the transport company that the product was delivered to Christchurch and Otaki.

[21]   In her affidavit in reply, Ms Pearson explains that she had looked at invoices all the way up to November 2015, expecting that a July order would have been fulfilled by then. This was the basis for her belief that the July order was never received.

[22]   Ms Pearson then states that the order, however, was not fulfilled in whole and has annexed exhibit MJP2-1 which shows the difference in the order submitted and

the product supplied. She argues that the losses calculated at p 107 of the Common Bundle are still an appropriate way to calculate the plaintiff’s losses sustained by being unable to order Ghibli products.

[23]   Exhibit MJP1-2 is a spreadsheet compiled by Ms Pearson which is near identical to the disputed spreadsheet contained at page 107 of the common bundle that Ms Pearson was alleged to have fabricated. The difference between this exhibit and page 107 is that it has been colour coded to show which items were from the order sent to Ghibli in 2016 and which were from the order of 2015.

[24]   Exhibit MJP1-3 shows the landed costs (cost price) and the retail price for each of the items in the two orders. Ms Pearson is claiming that the plaintiff’s losses are the difference between the cost price of those orders and the retail price, in essence, the lost profit.

[25]   These exhibits appear to support Ms Pearson’s claim that she did not fabricate the loss as such. The evidence, however, still appears to be insufficient to establish actual loss. For example, the basis on which an order made directly to Ghibli is now being claimed as a loss is not clear. There is no explanation as to whether the order was not filled or sent to PMA and not sent on to the plaintiff. Neither is it explained whether the price charged for each item was higher than if it had been ordered through PMA and thus the profits were reduced. Also, there is no proof that this order was actually sent.

[26]   Exhibit MJP1-4 is a quote from NZCS submitted after the trial in November 2017, while MJP1.5 is a screenshot showing the date of the quote. Exhibit MJP1.6 is a quote dated 30 November 2017. Exhibit MJP1.7 are screenshots showing the usual cost prices for the items quoted. While these four exhibits appear to be irrelevant in terms of establishing loss, they do support Ms Pearson’s contention that the losses were not fabricated.

[27]   The remaining two exhibits are those of David Ingram. Exhibit DKI1.3 is a spreadsheet Mr Ingram had prepared for the 2014 Ghibli order. This is to show how he calculated landed costs for a Ghibli order. Landed costs includes the cost of freight.

Exhibit DKI1.4 shows unit cost calculations. These two exhibits again appear to be irrelevant in terms of establishing loss.

[28]   Following the criteria stated by Tipping J in Savill v Chase Holdings, it is my view that the new evidence, while supporting Ms Pearson’s claim that she did not fabricate the losses claimed at page 107 of the Common Bundle, is unlikely to have a substantial bearing on establishing actual loss.

Conclusion

[29]   I am prepared to let the new evidence in because it is relevant to the claim advanced by the defendant that Ms Pearson manufactured evidence but, beyond tending to confirm that Ms Pearson has not fabricated parts of the claim, it does not quantify the losses allegedly sustained by the plaintiff.

[30]   With regards to the extension of time for filing Mr Frittoli’s affidavit, given this application is not opposed by the plaintiff, provided their evidence in response is also accepted, there would be no prejudice to the plaintiff in admitting this evidence and it is admitted accordingly. It should be filed by 5.00pm on 21 February 2018.

Churchman J

Solicitors:

Alan Campbell, Porirua, for Plaintiff

kplegal Limited, Auckland for Defendant