QBE Insurance (International) Limited v Steward Motorsports European Limited

[2014] NZHC 1309

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-003382 [2014] NZHC 1309

UNDER

Section 67 of the Judicature Act 1908

IN THE MATTER

of an application for leave to appeal to the
Court of Appeal

BETWEEN

QBE INSURANCE (INTERNATIONAL) LIMITED

Appellant

AND

STEWARD MOTORSPORTS EUROPEAN LIMITED Respondent

Hearing:	On the papers
Counsel:	SRJ Hamilton for Appellant M Dellow for Respondent
Judgment:	11 June 2014

JUDGMENT OF ASHER J (Application for leave to appeal)

This judgment was delivered by me on Wednesday, 11 June 2014 at 1 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel: Kennedys, Auckland.

Anderson Creagh Lai, Auckland. R Dellow, Auckland.

QBE INSURANCE (INTERNATIONAL) LTD v STEWARD MOTORSPORTS EUROPEAN LTD [2014] NZHC 1309 [11 June 2014]

[1]      This is an application for leave to appeal to the Court of Appeal from a judgment of 18 December 20131  in which I dismissed the appellant’s appeal and upheld the District Court Judge’s decision to enter judgment for the respondent and grant it damages in the sum of $41,874.51 together with interest and, in a second decision, awarded costs against the appellant.2

[2]      The appeal involved an insurance claim by a motor engineering company for costs resulting from damage to the motor vehicle following an accident where the vehicle was being driven by an employee of the respondent.  The facts are set out fully in the decision.

Relevant principles

[3]      The threshold test for bringing a second appeal is high.   In Waller v Hider

the Court of Appeal described the test as follows:3

The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal. …

[4]      The Court, after noting that the “scarce time and resources of the High Court and of this Court are not to be wasted”, added:4

Upon a second appeal this Court is not engaged in the general correction of error.    Its  primary  function  is  then  to  clarify  the law  and  to  determine whether it has been properly construed and applied by the Court below.  It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.

When the disputed matter is entirely or largely a question of fact the task of the applicant … is harder.  An issue of fact in a matter falling within the jurisdiction of an inferior Court will seldom be of public importance. …

[5]      Questions of cost and delay will be relevant to the exercise of the discretion to grant leave.5

1      QBE Insurance (International) Ltd v Steward Motorsports European Ltd [2013] NZHC 3457.

2      QBE Insurance (International) Ltd v Steward Motorsports European Ltd [2014] NZHC 886.

3      Waller v Hider [1998] 1 NZLR 412 (CA) at 413.

4      At 413.

5      Waller v Hider, above n 3, at 414; Snee v Snee (1999) 13 PRNZ 609 (CA) at [21].

Point on appeal

[6]      The  appellant  submits  that  there  are  two  factual  and  legal  errors  in  the judgment which require clarification:

(a)       The  finding  that  the  brakes  had  been  worked  on  as  alleged  by

Steward; and

(b)      The decision to uphold the award of interest in favour of Steward.

The first point – no evidence that the brakes had been bled

[7]      QBE submits that there was an error justifying a further appeal  because contrary to the finding in the High Court decision the Judge in the District Court had no sound basis for accepting Mr Barnes’ evidence that he had bled the car brakes. His assertion was inconsistent with the finding of old brake fluid in the brake fluid reservoir.  It is submitted that Mr Barnes did not actually bleed the brakes at all and had lied.  It is submitted that the District Court Judge was wrong in preferring the evidence of the respondent’s expert to that of the appellant’s expert.  It is submitted that the only logical and rational explanation was overlooked.

[8]      What the appellant wants to do is for a third time have judicial consideration (this time by three Judges) of competing detailed factual and expert evidence, and the extensive submissions that the appellant and respondent have already made in relation to that evidence, and to assess for a third time whether the respondent’s witnesses were telling the truth when they said that the brakes had been bled.  This is in relation to what is in essence a background credibility issue, as the primary issue was whether the employee drove the car on a jaunt of his own.

[9]      I note that the appellant relies on the decision of Barnes v QBE Insurance (International)  Ltd  as  authority  for  the  proposition  that  the  interpretation  of insurance contracts is a matter of public importance.6    However, that case involved

the interpretation of a specific clause that was in wide use at the time.  There had

6      Barnes v QBE Insurance (International) Ltd HC Auckland CIV-2010-404-5651, 13 October

2011.

been no authority on the construction of the clause.  No such issue arises in this case, which turned on matters of fact.  It was noted in Barnes that questions of delay and expense  can  often  outweigh  the  importance  of  correcting  any  alleged  error  on appeal.7

[10]     This is patently the type of assessment of credibility exercise that is not warranted on the second tier of appeal.  It involves a matter of fact, and there is no issue of particular significance or public importance that arises.  An allegation of the making of a fraudulent claim is not intrinsically of particular importance in the context of a modest insurance claim.  In my view it would come close to abusing the Court process to have three senior Judges carry out such a time consuming exercise assessing for the second time the trial Judge’s reasons for accepting the credibility of the respondent’s witnesses.

The second point – interest

[11]     It is submitted that the respondent should not have received interest because it did not produce any evidence at trial that costs had been incurred, or that the customer who was claiming for the damage against the respondent would have made a claim for interest.   The appellant’s submissions appear to then suggest that this means that the costs award was in error because the Calderbank offer exceeded the amount of damages that should have been awarded.

[12]     These issues were dealt with fully in the High Court decision.   I do not propose traversing them again.   The issue is essentially one of factual assessment rather than law.   It was specific to the particular facts as they arose.   Again, the relatively modest amount involved is a relevant consideration.  It does not justify the further pursuit of this litigation which has already been twice considered and ruled upon.   I do not consider that any point of law or fact of sufficient importance to

outweigh the cost and delay of a further appeal arises.

7 At [42].

General assessment

[13]     For the reasons given, I conclude that no important question of law or fact arises.

[14]     These proceedings have been underway now for in excess of five years. Despite the relatively modest sum of money involved there has been a six day hearing in the District Court and a one day hearing in the High Court.  The costs of the litigation are becoming quite disproportionate to the amount involved.

[15]     It is no answer for the appellant to say as it does that if it fails the respondent will be entitled to costs.  The draining effect in terms of both time and expense of significant civil litigation is well known and understood, and Court awarded costs can never properly assuage these.

[16]     On the one hand the appellant is a multi-national insurer.  On the other hand the respondent is a small business that has already had to meet some costs because of the accident, and is being held responsible for the balance of the costs of the crashed motor vehicle.  The respondent has been out of funds for approximately five and a half years.

[17]     These more general factors also work against a second appeal.

Result

[18]     Application for leave to appeal is declined.

……………………………..

Asher J