Svitzer Salvage BV v Z Energy Limited
[2013] NZHC 3541
•20 December 2013
IN THE HIGH COURT OF NEW ZEALAND IN ADMIRALTY
WELLINGTON REGISTRY
CIV-2012-485-452 [2013] NZHC 3541
IN THE MATTER of an admiralty action in personam
BETWEEN SVITZER SALVAGE BV Plaintiff
ANDZ ENERGY LIMITED First Defendant
SEAFUELS LIMITED Second Defendant
On the papers
Counsel: L J Taylor QC and J B Orpin for the Plaintiff
R Gordon for the First Defendant
C R Carruthers QC and P Barratt for the Second Defendant
Judgment: 20 December 2013
JUDGMENT OF GODDARD J AS TO RECALL
This judgment was delivered by me on 20 December 2013 at 11.30 am, pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Izard Weston, Wellington for Plaintiff
Minter Ellison Rudd Watts, Wellington for First DefendantJones Fee, Auckland for Second Defendant
SVITZER SALVAGE BV v Z ENERGY LIMITED [2013] NZHC 3541 [20 December 2013]
[1] Following the issue of my judgment in the above matter on 4 October 2013, counsel for the plaintiff sought a recall of the judgment in relation to the entry of summary judgment in favour of the second defendant in the first cause of action. The application was made on the basis of an absence of jurisdiction to enter summary judgment in the first cause of action, judgment not having been similarly entered in relation to the second and third causes of action. Thus there was a plain mistake on the part of the Court, constituting a proper ground for recall of the judgment under r 11.9 of the High Court Rules, as per the decision of the Court of
Appeal in Unison Networks Ltd v Commerce Commission.1
[2] The application for recall is granted and the entry of summary judgment in favour of Seafuels in relation to the first cause of action is vacated.
[3] The issue now is whether to grant Seafuels’ alternative application for strike-out of the first cause of action in substitution for the entry of summary judgment. Having indicated an intention to adopt that course, I invited submissions from both Svitzer and Seafuels in relation to that outcome, or to any other course of action.
[4] It is regrettable there has been a delay in reaching this point. Submissions filed in response to my invitation were filed in the Registry by counsel for both Svitzer and Seafuels on 11 and 18 October 2013 but, despite enquiries made of the Registry by my clerk, the submissions were not located and placed before me until very recently.
The judgment of 4 October 2013
[5] The first cause of action pleaded by Svitzer was that the agreement signed between itself and Seafuels (the charterparty) was void for duress. Svitzer pleaded that the actions of the master of Awanuia, Captain Hunter, constituted illegitimate pressure in terms of duress:
On or about 9 October 2011, the master of the Awanuia, upon being requested by the salvage master Jan Polderman to assist by bringing the Awanuia alongside the Rena to enable removal of fuel oil and other
1 Unison Networks Ltd v Commerce Commission [2007] NZCA 49 at [32].
contaminants, refused to do so until such time as a contract for hire was in place.
…
The Master of the Awanuia threatened to withhold the vessel from providing assistance until a contract for hire was in place.
…
[6] In dealing with the first cause of action, I found that:2
... there is substance in Mr Carruthers’ submission that the pleading of the first cause of action is deficient. For instance, there is no express pleading of a causal nexus between the alleged threat by Seafuels on 9 October and Svitzer’s acceptance of the terms of the charterparty under protest later that same day.
...
Captain Hunter’s reasons for refusing to bring Awanuia close to Rena to practice manoeuvres for the oil transfer, until he had a job safety and hazard plan in place and approved, do not disclose any illegitimate conduct or pressure by him on Seafuels’ behalf. The uncontested evidence, including the contemporary documentary evidence, is that a job safety and hazard plan had to be in place and approved before the transfer of fuel onto Awanuia could begin. Therefore, Captain Hunter’s refusal to come alongside when first requested to do so, was legitimate.
Captain Hunter’s further explanation, that he understood these safety documents to be part of the “commercial details” that had to be resolved before the oil transfer operation could go ahead, has not been contradicted.
...
What is abundantly clear is that there were a great many competing pressures on Svitzer during the critical time period between its appointment as salvor on 5 October, and 4.03 pm on 9 October, when it accepted the terms of the charterparty under protest.
...
The overwhelming nature of all of these pressures provides a clear answer as to why Svitzer was compelled to accept the terms of the charterparty under protest ...
In conclusion therefore, I accept Mr Carruthers’ submission that Svitzer was
motivated in signing the charterparty by factors unrelated to [Seafuels].
2 Svitzer Salvage BV v Z Energy Limited [2013] NZHC 2585 at [168], [170], [171], [175], [177]
and [178].
[7] I declined Seafuels’ application for strike out in relation to the second and
third causes of action.
[8] The second cause of action, as pleaded by Svitzer, is that the charterparty should be set aside by the Court in its admiralty jurisdiction on the basis that it was entered into in circumstances that allowed Seafuels to avail itself of the calamities of others to achieve a contractual outcome that was, in effect, unjust, oppressive and exorbitant. The third cause of action is brought under the Salvage Convention. In relation to this cause of action, Svitzer has pleaded that the charterparty or its terms should be annulled or modified because:
(a) it was entered into under undue influence or the influence of danger and its terms are inequitable; or
(b)the payment under the charterparty is in an excessive degree too large or too small for the services actually rendered.
[9] I found that both of those causes of action were reasonably arguable and should go to trial. Importantly, neither of these causes of action requires the existence of a threat, or illegitimate pressure, in order to succeed, unlike the first cause of action.
Submissions
[10] Mr Taylor QC, for Svitzer, argued that the first cause of action should not be struck out, on two grounds. First because the deficient pleadings can be amended and therefore do not provide a proper basis for strike-out. Second, because the factual findings made in the course of considering the summary judgment application cannot be made in the context of a strike out application and do not support strike out in this case.
[11] Alternatively, Mr Taylor submitted, even if the first cause of action were suitable for strike out, the Court should not do so as a matter of discretion, arguing that the same factual circumstances arising under the second and third causes of action also arise in the first cause of action. Therefore, he submitted, striking out the
first cause of action will not materially reduce the evidence the Court will need to consider, nor the length of the trial.
[12] In response to these arguments, Ms Barratt, for Seafuels, submitted that recall applications are not to be used to re-litigate matters already considered or to challenge substantive findings. That, Ms Barratt contended, is what Svitzer was endeavouring to do in its submissions on recall.
[13] Ms Barratt further submitted that Svitzer had already heard Seafuels’ argument on the deficiencies of its pleadings during the earlier interlocutory proceedings heard and determined by Associate Judge Gendall and had amended its pleadings. It should not now be given a further opportunity to remedy any deficiency in its pleadings. To allow it to do so after two hearings would be actively prejudicial to Seafuels.
[14] In conclusion, Ms Barratt requested that:
... the Court having not addressed the application to strike out after determining that summary judgment was appropriate for the duress cause of action, [should] now resolve that application based on the submissions before the Court at the time of the hearing. The question is whether or not the allegations in the statement of claim, in relation to the first cause of action, disclose a reasonable cause of action. The second defendant has previously asserted (inter alia) that declining to perform a service before a contract for that service is in place is commercial common sense, and is not capable in law of amounting to the exertion of illegitimate pressure. The second defendant maintains that position and repeats that the pleading does not provide any basis for considering otherwise.
Discussion
[15] The principles applicable to a strike-out application are well settled:
(a) a strike-out application proceeds on the assumption that the facts pleaded in the statement of claim are true;3
3 Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA) at 267.
(b)a cause of action will only be struck out if it is so untenable that it cannot possibly succeed.4 It will not be struck out if any deficiencies can be cured by amending the pleadings;5
(c) the jurisdiction is only to be exercised sparingly in clear cases.6
[16] Against that context, I refer to the leading statement of Wild CJ in
Horowhenua County v Nash (No 2 on recall):7
Generally speaking, a judgment once delivered must stand for better or worse subject, or course to appeal. Were it otherwise there would be great inconvenience and uncertainty.
[17] I recalled this judgment on the basis of a plain mistake as to remedy. Striking-out the first cause of action will rectify that mistake. It will be consistent with the findings I made in the judgment, which are that there are no pleaded facts which support the first cause of action. It is not open to reverse those findings in the context of a recall application and nor do I resile from them. As the Court stated in Faloon v Commissioner of Inland Revenue:8
... it is quite clear that the discretion to recall must be exercised with circumspection, and it must not in any way be seen as a substitute for appeal. In particular there are some things that it can be said the power to recall does not extend to. It does not extend to a challenge of any substantive findings of fact and law in the judgment. It does not extend to a party recasting arguments previously given, and re-presenting them in a new form. It does not extend to putting forward further arguments, that could have been raised at the earlier hearing but were not.
[18] To simply amend the pleadings so as to assert a causal nexus in the manner suggested by counsel would not fill the factual void that exists or alter the situation. The affidavit evidence of Mr Polderman and Captain Hunter about a refusal to come alongside until the commercial details were resolved does not disclose a threat, let
alone one that was material to and acted upon by the decision-makers in Denmark.
4 Ibid.
5 Marshall Futures Ltd v Marshall [1992] 1 NZLR 316 (HC) at 324; Cooper v van Heeren [2007]
3 NZLR 783 (CA) at [51] (per Chambers J); and Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [123] (per Blanchard, Tipping and McGrath JJ).
6 Attorney-General v Prince and Gardner, above n 3.
7 Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633.
8 Faloon v Commissioner of Inland Revenue (2006) 22 NZTC 19,832 (HC) at [13].
Nor is there any real dispute in their evidence. I do not believe the first cause of action should be permitted to go further.
[19] In my view, the issue of whether the findings I made were open to me in the context of a strike-out are properly to be addressed on appeal, should Svitzer wish to pursue that course of action.
[20] Finally, Mr Taylor’s submission that striking out the first cause of action will not materially reduce the evidence the Court needs to consider or the length of the trial will be a matter for counsels’ judgement. As Mr Taylor said, that evidence may still be called in support of the second and third causes of action, if relevant to those. The plaintiff is therefore not prejudiced or precluded from calling that evidence by the striking out of the first cause of action.
Result
[21] As earlier recorded in [2] above, the application for recall is granted and the entry of summary judgment in favour of Seafuels in relation to the first cause of action is vacated.
[22] In substitution, the first cause of action against the second defendant is struck out.
Goddard J
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