The Roofing Specialists Ltd v BLM Engineering Company Ltd

[2012] NZHC 1279

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2012-419-359 [2012] NZHC 1279

IN THE MATTER OF     an appeal against the decision of the

District Court at Hamilton

BETWEEN  THE ROOFING SPECIALISTS LTD Appellant

ANDBLM ENGINEERING COMPANY LTD Respondent

Hearing:         7 June 2012

Counsel:         J Niemand for Appellant

TM Braun and K Lomas for Respondent

Judgment:      8 June 2012

JUDGMENT OF BREWER J

This judgment was delivered by me on 8 June 2012 at 3:30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

SOLICITORS

Niemand Peebles Hoult (Hamilton) for Appellant

Harkness Henry (Hamilton) for Respondent

THE ROOFING SPECIALISTS LTD V BLM ENGINEERING COMPANY LTD HC HAM CIV-2012-419-359 [8 June 2012]

Introduction

[1]      In a reserved judgment delivered on 1 March 2012 in the District Court at Hamilton, Judge RG Marshall found against the appellant in its claim against the respondent for $42,184.09.

[2]      By notice of appeal dated 27 March 2012, the appellant appeals against the judgment of the District Court Judge.   One of the grounds of appeal is that the District Court Judge erred in finding that a Mr Butterfield did not have authority to bind the respondent to a contract with the appellant.  By notice of application dated

19 April  2012,  the  appellant  seeks  leave  to  adduce  on  the  appeal  the  evidence contained in an affidavit of Mr Butterfield filed with the application.

[3]      My task is to decide whether the appellant should be permitted to adduce on the appeal the evidence of Mr Butterfield as contained in the affidavit.

Context

[4]      The case before the District Court Judge concerned a claim by the appellant that it had a contract with the respondent by which the appellant provided roofing services for a building owned by a company related to the respondent.   The respondent was to lease the building from the related company.

[5]      The appellant dealt initially with the head contractor for the building project. The head contractor accepted the appellant’s tender for the roofing services.   A contract between the appellant and the head contractor was concluded.  However, the company from which the appellant was to obtain the materials required for the performance of the contract did not trust the head contractor.  There was a meeting between representatives of the appellant, the materials supplier and the head contractor.    The  appellant’s  representative  was  put  in  touch  by  telephone  with Mr Bill Butterfield.   Mr Butterfield was employed by the head contractor.   At a subsequent  meeting  with  the  appellant’s  representative,  Mr Butterfield  gave  the appellant’s representative a purchase order in the name of the respondent confirming

the appellant’s tender price.  The purchase order directed all correspondence to go to

the head contractor.

[6]      It  was  uncontested  that  Mr  Butterfield  was  in  lawful  possession  of  the purchase order book from which the purchase order came.  A Mr Elliott, who was both a director of the respondent and of the respondent’s related company, gave evidence that he gave the purchase order book to Mr Butterfield with very clear instructions that it was to be used for amounts less than $1,000.   Its purpose was limited to the obtaining of incidentals so that the contract between the related company and the head contractor could be prepared in practical terms.

[7]      It  was  a  plank  of  the  appellant’s  case  against  the  respondent  that  the furnishing of the purchase order amounted to a new contract between the appellant and the respondent.  The District Court Judge found that there was no such contract. The Judge held  that,  on  the evidence of Mr Elliott  and  on the evidence of the appellant’s representative (which he found to be consistent with that of Mr Elliott), Mr Butterfield did not have any actual authority to enter into a binding contract on behalf of the respondent.

Affidavit

[8]      Mr Butterfield did not give evidence at the trial.

[9]      The appellant’s representative (Mr Thomas) has filed an affidavit sworn on

24 April 2012 in support of the application to adduce evidence at the appeal which explains why not.  He deposes:[1]

I accept that the evidence was previously available.  With the witnesses we had (being myself, Mr Cairns and one of my employees), I thought we had

‘covered all our bases’ and it did not occur to me that Mr Butterfield would be  prepared  to  assist  our  case  given  his  previous  involvement  (and friendship) with the Director of the Respondent Company, or that we would

even need his evidence.

[1] Affidavit of Francis Allen Thomas in support of interlocutory application by appellant to adduce evidence on appeal, sworn 24 April 2012, at para 3.

[10]     The affidavit of Mr Butterfield is very short.  It covers less than two pages. Relevant passages are:

(a)       ...  BLM  [the  respondent]  supplied  [the  head  contractor]  with  a Purchase Order book so that [the head contractor] could take advantage of [the respondent’s] buying power and the arrangements that they have with various suppliers. [2]

[2] Affidavit of Matthew William Butterfield, sworn 17 April 2012, at para 4.

(b)      There was never any limit set on the use of the Purchase Order book.

I was not told to seek prior approval for using a Purchase Order exceeding  any  specific  amount  or  that  the  Purchase  Order  was

limited to any specific purposes.  I used the Purchase Order book to achieve a finished result for [the respondent] and [the related company].[3]

[3] Ibid, at para 7.

(c)       I  do  not  consider  that  [the  respondent’s]  Purchase  Order  that  I provided to [the appellant] was outside the scope of authority that I had been given by [the respondent].[4]

The Law

[4] Ibid, at para 8.

[11]     It is, of course, trite that when a plaintiff sues a defendant, and the case is heard at trial, the plaintiff is expected to put forward the evidence which is available to it and upon which it relies.  During the discovery process, this evidence is made known to the defendant so that the defendant (which itself has obligations of discovery) can prepare its own case.  There are obvious reasons of efficiency, cost and policy why a party which has lost a case should not be permitted a rematch just because it can point to evidence favourable to it which might have made a difference had it been heard by the trial Judge.  However, as with most aspects of litigation, there can be situations where exceptions should be made.

[12]     Rule 20.16 of the High Court Rules provides:

20.16   Further evidence

(1)       Without leave, a party to an appeal may adduce further evidence on a question of fact if the evidence is necessary to determine an interlocutory application that relates to the appeal.

(2)       In all other cases, a party to an appeal may adduce further evidence only with the leave of the court.

(3)       The court may grant leave only if there are special reasons for hearing the evidence.  An example of a special reason is that the evidence relates to matters that have arisen after the date of the decision appealed against and that are or may be relevant to the determination of the appeal.

(4)       Further evidence under this rule must be given by affidavit, unless the court otherwise directs.

[Emphasis added]

[13]     Special reasons will be found to exist if the evidence sought to be adduced is cogent, likely to be material, and not reasonably able to have been discovered at an earlier stage.  The power to grant leave is exercised sparingly because an appellant is not permitted to bolster its case with new evidence on appeal.[5]

[5] Complaints Committee No.1 of the Auckland District Law Society v P 18 PRNZ 760, at [22];

Culverden Retirement Village Ltd v McLuckie HC Auckland CIV-2007-404-750 18 September

2007, Andrews J, at [16].

[14]     The Court retains a discretion to permit evidence to be adduced on an appeal if it is cogent and material even if it is not “fresh” evidence.  That is to say, even if it is evidence which could have been reasonably discovered at the time of the trial. However:[6]

[6] Rae v International Insurance Brokers [1998] 3 NZLR 190 (CA).

[W]hile the  absence of freshness is not an absolute  disqualification, the criteria for admission in such circumstances must be very strict.  In our view, when the evidence is not fresh it should not be admitted unless the circumstances are exceptional and the grounds compelling.   In addition, it will need to pass the tests of credibility and cogency.

The appellant’s submissions

[15]     The appellant accepts that the evidence of Mr Butterfield is not fresh.   It must, therefore, persuade me that the evidence is not only credible and cogent but that there are exceptional circumstances and compelling grounds for it to be admitted at the appeal.

[16]     The   appellant   submits   that   the   issue   of   the   authority   conferred   on

Mr Butterfield  to  use  the  purchase  order  book  was  a  critical  issue  in  the

determination  of  the  District  Court  proceeding.     The  proposed  evidence  of Mr Butterfield, it is submitted, goes directly to that issue and, if accepted, would have turned the case in favour of the appellant.   It is, therefore, in the overall interests  of  justice  for  the  evidence  to  be  admitted  on  appeal  and  in  the circumstances the special reasons test in r 20.16 is satisfied.

The respondent’s submissions

[17]     The  respondent  submits  that  the  proposed  evidence  does  not  cross  the threshold  for  admittance.    It  is  so  brief  that  it  cannot  be  considered  cogent  or material.  From a commercial point of view, it does not make sense (the purchase order book came from the respondent and the respondent was not a party to the building contract).

[18]     At most, the respondent submits, the proposed evidence might have added another point of view to the matters which the District Court Judge had to decide. This is not an exceptional circumstance and does not create a compelling ground for admittance.

Decision

[19]     I agree with the respondent’s submissions.

[20]     There is nothing exceptional about the circumstances in which the evidence is sought to be adduced.  Mr Butterfield was an obvious witness to be briefed for the trial and the appellant chose not to approach him for the reasons set out in the affidavit of Mr Thomas.  After the trial it has been found that he might have been able to give evidence favourable to the appellant.  That is not a compelling ground for admittance.

[21]     The proposed evidence as set out in Mr Butterfield’s affidavit is not credible or  cogent.     The  appellant’s  case  depended  on  it  being  able  to  prove  that Mr Butterfield was an agent of the respondent with a mandate sufficient to bind it to a contract with the appellant.  The respondent was merely the prospective tenant of

the building in question.  The evidence for the respondent given at the trial was that only a very limited mandate was given for a particular purpose.  This was consistent, as the District Court Judge found, with the evidence of the appellant’s witness, Mr Thomas.

[22]     Mr Butterfield’s proposed evidence does not address why the respondent, as the prospective tenant, would empower him to contract with the appellant to provide roofing services at a cost of $159,000.   He does not say anything about the circumstances in which he was given the purchase order book.

[23] The passage in the affidavit quoted at [10](a) above is inconsistent with the assertion quoted at [10](c).

[24]     The  passage  in  the  affidavit  quoted  at  [10](b)  above  is  consistent  with

Mr Butterfield having assumed a power without specific mandate.

[25]     In summary, the evidence goes nowhere near to exposing a situation which the interests of justice would require to have heard in a further trial.  There is, at the risk of repetition, no averment that the respondent specifically authorised the use of the purchase order book to make the respondent liable to contractors with the head contractor for major portions of a building project of which the respondent was to be the eventual lessee and not the owner.   There is no evidence, for example, upon which allegations of perjury might be founded or anything else which might lead the Court to suspect that its processes had been abused.

[26]     The application for leave to adduce evidence on appeal is dismissed.

[27]     Costs are reserved  and  are left  for the Judge who determines the actual appeal.

Brewer J