Red Stag Timber Limited v Juken New Zealand Limited

[2023] NZHC 2440

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002753

[2023] NZHC 2440

BETWEEN

RED STAG TIMBER LIMITED

Plaintiff/Applicant

AND

JUKEN NEW ZEALAND LIMITED

Defendant/Respondent

Hearing:

On the Papers

Counsel:

N Flanagan and E Watt for Plaintiff/Applicant

A Galbraith KC, C Bryant and G Luen for Defendant/Respondent

Judgment:

1 September 2023

JUDGMENT OF VENNING J

Application for leave to appeal

This judgment was delivered by me on 1 September 2023 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Meredith Connell, Auckland

Hesketh Henry, Auckland Counsel:    A R Galbraith KC, Auckland

RED STAG TIMBER LIMITED v JUKEN NEW ZEALAND LIMITED [2023] NZHC 2440 [1 September 2023]

Introduction

[1]                 In a decision delivered on 27 July 2023 the Court made the following orders on Red Stag Timber Limited’s (Red Stag’s) application for leave to file an amended statement of claim:1

[45]      Red Stag’s application for leave to file an amended statement of claim in the form of the 6ASOC is dismissed.

[46]      Leave is granted to Red Stag to file an amended statement of claim on condition that amended statement of claim is not to refer to and/or rely on the pre-December 2012 conduct of JNL to support any claim for loss, including any loss claimed to have arisen after December 2012. Any losses claimed after December 2012 are to be based solely on conduct after December 2012. Red Stag may, however plead JNL’s conduct prior to December 2012 as background.

[2]                 Red Stag seeks leave to appeal from that interlocutory decision.2 The parties agreed that the application could be dealt with on the papers. They have exchanged written submissions.

[3]                 It is unnecessary in this leave decision to rehearse the background to the proceeding which is set out fully in the previous judgments of this Court and the Court of Appeal.

Grounds of appeal

[4]                 The proposed grounds of appeal are that the Court erred in dismissing Red Stag’s application for leave to file an amended statement of claim in the form of the sixth amended statement of claim (6ASOC) because:

(a)the Court erred in its interpretation of the Court of Appeal’s judgment in Juken New Zealand Limited v Red Stag Timber Limited;3 and

(b)the Court erred in its interpretation of the Fair Trading Act 1986, in particular, in finding s 43A of the FTA limits a party’s ability to pursue allegations of loss based on representations and conduct which

1      Red Stag Timber Ltd v Juken New Zealand Ltd [2023] NZHC 1979.

2      Senior Courts Act 2016, s 56(3).

3      Juken New Zealand Limited v Red Stag Timber Limited [2023] NZCA 242.

occurred outside the time period specified in s 43A and that representations in conduct which occurred prior to December 2012, being the relevant time period, cannot support any claim for loss under the FTA; and

(c)the Court erred in finding the 6ASOC did not properly plead relief in respect of representations and conduct prior to December 2012 in reliance on the decision of the Court of Appeal.

[5]                 It is submitted that it is in the interests of justice leave to appeal be granted because:

(a)it is fairly arguable the Court erred in the respects set out;

(b)the judgment is of great significance to the applicant and will be finally dispositive of a substantive part of the proceeding;

(c)the judgment is of general importance to the administration of justice in civil and commercial matters because of its interpretation of s 43A and its operation; and

(d)the orders of the Court of Appeal are ambiguous and the opposed appeal will enable that Court to resolve the ambiguity.

[6]                 In the written submissions in support Mr Flanagan and Ms Watt also repeat the submission that Red Stag’s interpretation is arguably consistent with authority of the Supreme Court and Court of Appeal.4

The opposition

[7]Juken New Zealand Limited (JNL) opposes the application for leave. It says:

4      Commerce Commission v Carter Holt Harvey Ltd [2009] NZSC 120 at [33]; and Telecom Corporation of New Zealand Ltd v Commerce Commission [2012] NZCA 278.

(a)the Court did not err and correctly applied the judgment of the Court of Appeal;

(b)the intended appeal lacks merit;

(c)Red Stag has applied for leave to appeal the Court of Appeal’s judgment to the Supreme Court. That is the appropriate forum for Red Stag’s argument regarding the interpretation and operation of s 43A; and

(d)overall it is not in the interests of justice for the application to be granted.

Principles

[8]                 The parties agree the principles to apply on an application for leave were confirmed by the Court of Appeal in Greendrake v District Court of New Zealand as:5

(a)a high threshold exits;

(b)the applicant must identify an arguable error of law or facts;

(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;

(d)the circumstances must warrant incurring further delay; and

(e)the ultimate question is whether the interests of justice are served by granting leave.

Analysis

[9]                 I accept that the effect of the Court’s decision is to reduce the ambit of the damages claim pursued by Red Stag in the 6ASOC. Obviously that is a matter of

5      Greendrake v District Court of New Zealand [2020] NZCA 122 at [6].

significance to Red Stag. However this Court’s decision must be seen in context. Ultimately this Court’s decision on the application for leave to file the 6ASOC involved the interpretation and application of the Court of Appeal judgment. It is the Court of Appeal’s judgment which has practically had the effect of reducing the ambit of Red Stag’s damages claim, not the judgment of this Court. The Court of Appeal expressly left it to this Court to manage the consequences of its decision on the form of the pleadings. At [73] of its decision it noted:

[73] It will be for Red Stag to amend its pleading in a manner that conforms with this judgment. The pleadings will of course remain under the supervision of the High Court as the case proceeds.

[10]             I do not consider it reasonably arguable that the Court of Appeal decision can be interpreted in the way Red Stag argues for. The Court of Appeal judgment was not limited to only strike out any claim for losses as a consequence of JNL’s representation or conduct suffered prior to December 2012. I agree with the submission for JNL that Red Stag’s argument essentially requires the reading down of [76] of the Court of Appeal decision so as to effectively reduce it to the following:

… striking out those parts of the fourth amended statement of claim that seek relief in respect of representations and/or conduct by JNL prior to December 2012 and all claims (or any part thereof) based or relying on such allegations.

[11]There is no reason to read down the Court of Appeal’s decision in that way.

[12]             This Court’s decision did no more than implement the Court of Appeal’s decision. To the extent that Red Stag seeks to argue the proposed appeal raises general issues as to the interpretation and operation of s 43A in commercial cases, Red Stag has an application for leave to appeal the Court of Appeal’s decision to the Supreme Court. It will be for the Supreme Court to determine whether or not the Court of Appeal decision raises such significant issues as to the interpretation and operation of s 43A to warrant leave being granted.

[13]             Red Stag’s arguments in support of the application for leave to appeal are essentially a rerunning of the arguments before the Court of Appeal which were repeated, albeit reframed, before this Court on the application for the leave to file the 6ASOC in the form it was presented to the Court. The issue has been ruled on by both

the Court of Appeal and this Court. In the course of its decision this Court considered the authorities Red Stag relies on.

[14]             For the above reasons and the reasons set out in this Court’s earlier judgment, I do not accept that it is necessary for the Court of Appeal to resolve any ambiguity arising from its judgment.

[15]             The proposed appeal would, if leave was granted, inevitably lead to vacation of the fixture currently scheduled for February 2024. While that may still be the outcome if the Supreme Court were to grant leave, it is a further factor which supports the refusal of the application for leave to appeal this Court’s decision. This proceeding is a commercial proceeding which has been before the Court in one form or another since 2017. It should be brought to conclusion.

[16]             For the above reasons, Red Stag fails to meet the high threshold for grant of leave in this case. The interests of justice would not be served by the grant of leave.

Result

[17]             The application for leave to appeal is dismissed. Costs to the respondent on a 2B basis together with any disbursements as fixed by the Registrar.

Venning J