Singh v Rutherford

[2013] NZHC 2301

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-005301 [2013] NZHC 2301

IN THE MATTER OF

an appeal against the decision of the

District Court at Manukau

BETWEEN

GURPREET SINGH and MEENA SINGH Appellants

AND

GLENN DOUGLAS RUTHERFORD and

WENDY KAREN JOLLY Respondents

Hearing:	28 August 2013
Counsel:	D M O'Neill for the Appellants M R T Colthart for the Respondents
Judgment:	5 September 2013

JUDGMENT OF DUFFY J

[Reasons re Refusal of Application for Leave to Appeal]

This judgment was delivered by Justice Duffy on 5 September 2013 at 11.00 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Counsel:     D M O’Neill, Hamilton

M R T Colthart, Auckland

SINGH v RUTHERFORD and JOLLY [2013] NZHC 2301 [5 September 2013]

[1]      The respondents were unsuccessful in their application for leave to appeal to the Court of Appeal. The reasons for the refusal of leave now follow.

[2]      The respondents’ application for leave to appeal identified four issues.  They were:

(a)      Whether the correct measure of any loss suffered by the plaintiffs is diminution of value of the plaintiffs’ property, or loss of profit arising from the plaintiffs’ operation of the orchard at the property;

(b)If the loss of profit is the correct measure, whether the failure by the appellants to establish on the balance of probabilities the amount of loss of profit at trial justified the dismissal of the appellants’ claim;

(c)      Whether the High Court on appeal ought to attempt to assess damages based on evidence given at trial, when the trial Judge has been unable to do so; and

(d)Whether, in the circumstances, the High Court ought to have referred the matter back to the District Court to assess damages.

[3]      This case has a tortured history.   The full details are to be found in the judgments of Wylie J: see Singh v Rutherford [2012] NZHC 3801, [2012] NZAR

323 and in the judgment from which the respondents now seek leave to appeal: see

Singh v Rutherford [2013] 1276, 31 May 2013.

[4]      In  short,  the  appellants  chose  to  reduce  their  claim  to  enable  them  to commence proceedings in the District Court.  One of their claims was that the respondents had breached a contractual warranty as to the size of the canopy hectares of a lemon and kiwifruit orchard.  The District Court found that there was a clear difference between the warranted size of the orchard and the actual size, but found that the appellants had not relied on the warranty when they purchased the orchard. Thus, they failed in their claims for loss.  On appeal to this Court, Wylie J found that the warranty was enforceable, and that the breach meant that the appellants could

claim for their loss.  The proceeding was sent back to the District Court to determine loss and to quantify damages.  The District Court found that the appellants had not proved that they had suffered any loss.  The judgment was appealed to this Court and I found that the appellants had proved some of their loss.  Accordingly, I found that they were entitled to a lower sum of damages than they had calculated.  I gave the parties the opportunity to reach an agreed position on the adjusted quantum of damages, with leave being reserved to them to return to Court on this issue, should they  need  to  do  so.    Thus,  this  proceeding  has  been  considered  twice  in  the District Court and twice in this Court.

[5]      The parties are agreed as to the applicable legal tests for a grant of leave to appeal.  They acknowledge that the tests are those set out in Waller v Hider [1998] 1

NZLR 412 (CA) at 413 and in Snee v Snee (1999) 13 PRNZ 609 at [15]:

[T]he 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 the delay involved in the further appeal.

[6]      Further, as was recognised in Snee at [21], on a second appeal, the Court of Appeal is not engaged in the general correction of error.  In this regard, it is the High Court, “as the intermediate appellate Court, that has the primary responsibility for correcting error and ensuring that justice is done to the parties”.  To warrant a second appeal, the proposed appeal must raise “some wider public interest” that justifies the “expense both to the parties … and to the Court system, of a second appeal”.

[7]      The parties’ dispute lies in the application of these legal principles.

First ground of appeal

[8]      The respondents contend that their proposed appeal raises a matter of general legal importance regarding the correct measure of damages for a breach of a contract for sale and purchase.  They attempt to argue that the correct method of valuing loss is diminution of value, rather than loss of profits, which is the basis on which loss was assessed in this Court.  I do not consider that this argument raises any new significant issues of general importance that warrant the attention of the Court of

Appeal.  The available use of loss of profits as a measure for this type of sale and purchase agreement is well settled: see Walsh v Kerr [1989] 1 NZLR 490 (CA) at

493,  Bloxham  v  Robinson  (1996)  7  TCLR  122,  Milne  v  Davis  Properties  Ltd CA6/89, 2 March 12990.  In Law of Contract in New Zealand (4th ed, LexisNexis, Wellington, 2012) at 823, the author describes loss of profits as “the most obvious expectation loss”.

[9]      The respondents argue that the judgment of this Court suggests that to prove a loss of profits claim, it is necessary to have evidence of diminution of value of the subject property.  As there is no evidence of diminution of value, the respondents contend that the appellants have failed to properly prove their loss of profits claim.  I do not consider the judgment makes that extraordinary suggestion.  If it did, it would be wrong and contrary to settled principle on proof of loss of profit.

[10]     The respondents contend that both this Court and the lower Court determined that the appellants’ expert was unable to be relied upon.  By contrast with the lower Court, this Court then relied on a mix of evidence of the appellants’ expert, where confirmed by the evidence of the respondents’ experts, as well as the respondents’ experts’ evidence to reach a view on whether the appellants had suffered loss and, if so, how much.  The respondents argue that their experts were not giving evidence to support or approve the appellants’ claim.   They argue that whilst their experts’ primary duty was to assist the Court, their evidence was focused on casting doubt on the appellants’ experts’ assessment of loss.  Accordingly, the respondents argue that the available evidence of loss of profits was not sufficiently reliable or reasonable to prove this aspect of the appellants’ claim.

[11]     Rule 9.43 of the High Court Rules sets out the duties of an expert witness to the Court.  To argue that this Court cannot for the purpose of finding proof of a plaintiff’s claim rely on the common ground it comprehends from the totality of the expert evidence, as well as the expert evidence of a defendant where it supports the plaintiff’s claims, is both sophistic and untenable.  Such a question does not warrant a second appeal.

[12]     The respondents argue that if the trial Judge is unable to assess damages based on the evidence before him or her, then this Court on appeal ought not to attempt to assess damages based on that evidence.  However, this is a case where the Court found that there was evidence of loss available to the District Court, but the District Court had failed to recognise this.  That is a factual finding that is particular to this proceeding.  This Court then attempted to arrive at a result that provided a framework  for  the  parties  to  re-calculate  the  figures  that  were  in  evidence  to establish loss.  As the appellants have submitted, an appeal is by way of rehearing, and this Court is entitled to come to its own conclusions based on the material presented before it: see Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC

103, [2008] 2 NZLR 141 at 16.

[13]     None of the respondents’ arguments in support of the first proposed ground of

appeal meets the legal tests for the granting of leave to appeal.

Second ground of appeal

[14]     The  respondents  then  argue  that  the  appellants  failed  to  prove  any  real damage caused to them by the breach of warranty.  This is a factual issue that relates purely to this proceeding.  If the judgment of this Court erred in finding that the appellants had suffered actual loss, such an error is not the type of error warranting correction in the Court of Appeal.  It raises no issue of general public importance.

Third ground of appeal

[15]     This ground of appeal hinges on the reason why the court at first instance failed to assess damages.  If there was truly an absence of reliable and credible available evidence before the court at first instance, this might well be a reason for the first tier appellate court to hold back from assessing damages.  But where there is some evidence before the court at first instance that has not been found to be unreliable or not credible, it is then a matter for the appellate court to determine how it will deal with that evidence.  This decision will turn on the particular facts of the case.   It does not lead to the type of outcome that would engage the need for a

second appeal.  This ground of appeal does not satisfy the legal tests for the granting of leave to appeal.

Fourth ground of appeal

[16]     The respondents contend that once this Court found that the appellants had suffered  loss,  the  appropriate  outcome  was  to  refer  the  proceeding  back  to  the District Court.  Whether a case should be referred back to the Court of first instance involves the exercise of a discretion.  Further, it is settled law that, where possible, this Court should attempt to determine issues of loss and quantum, rather than to refer the matter back for rehearing: see Walsh v Kerr at 494. If the principle in Walsh v Kerr has been wrongly applied in this proceeding, that is not sufficient to warrant a second appeal.  This ground of appeal raises nothing that meets the tests for the grant of leave to appeal.

General

[17]     The respondents argued that even if their proposed grounds of appeal raised no questions of general public interest or importance that warranted a second appeal, nonetheless, the proposed grounds of appeal raised questions of private importance to them that were of sufficient importance to warrant a second appeal.  Here, they rely on the likelihood that the fresh calculation of loss is likely to come to an amount of just over $100,000. They say that they will have difficulty paying this sum.

[18]     I do not regard a party’s alleged inability to meet the cost of a damages award to constitute a ground warranting a second appeal.  The four court hearings that have already occurred have been a costly expense for the parties and a costly use of court time. The significance to the respondents of a damages sum that is around about half the sum originally claimed, and which is a sum well within the jurisdiction of the District Court, cannot of itself elevate the respondents’ desire to pursue this matter further to something that can objectively be viewed as being of such significant private interest that it merits a second appeal.

[19]     I am satisfied that all the respondents are really attempting to do here is to re- litigate before a third court factual issues that have no relevance beyond this proceeding simply because they are unhappy that the outcome for them has not been favourable.

Duffy J