Willcocks v Teat HC Rotorua CIV 2008-463-000784

[2011] NZHC 216

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV 2008-463-000784

BETWEEN  ARTHUR JOHN WILLCOCKS Plaintiff

ANDJAMES BUNNY TEAT Defendant

Counsel:         R O Parmenter for the Plaintiff

R B Stewart QC for the Defendant

Judgment:      15 March 2011 10:00:00

[SUPPLEMENTARY] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie on 15 March 2011at 10.00 am

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Distribution:

R O Parmenter:    [email protected]

R B Stewart QC:    [email protected]

WILLCOCKS V TEAT HC ROT CIV 2008-463-000784 15 March 2011

[1]      I gave interim judgment in this matter on 27 September 2010.  Paragraph 60 of my judgment provided as follows:

Result

[60]      I have concluded that the parties did enter into an oral agreement in or about September 1999, and that Mr Teat agreed to transfer 50 percent of his shares in G.B. Teat Limited to Mr Willcocks at book value.  Further, in my view, that agreement was not subsequently varied.  If I am wrong in that regard, in my judgment any additional term requiring that the parties should first work together to see whether they get along was either fulfilled, or waived.

(emphasis added)

[2]      The judgment was an interim judgment, because counsel had intimated to me that they required judgment only as to liability.  They were confident that they would be able to resolve the quantum of the damages claim if I concluded that there was an agreement as alleged by the plaintiff, Mr Willcocks.

[3]      In my interim judgment, I requested the parties to advise whether or not they required a further decision from me in relation to the damages claimed.

[4]      The respective memoranda that  were filed made it  clear that  there were significant differences between the parties.  Inter alia:

(a)      Mr  Stewart  QC  for  Mr  Teat  advised  that  there  was  a  substantial difference between the respective accountancy experts.

(b)Mr Parmenter for Mr Willcocks explained that one of the reasons for that discrepancy, was because the expert accountant for Mr Teat was basing his calculation on [60] of my judgment.  Mr Teat was saying that he held only 88 per cent of the shares in the company, and that

50 per cent of that shareholding was 44 per cent of the shares in the company.   The expert accountant for Mr Willcocks was basing his assessment  on  50 per  cent  of  the  shares  in  the  company  overall, notwithstanding that Mr Teat does not own all of the shares in the company.

[5]      Mr  Parmenter  filed  an  application  seeking  that  I  should  amend  [60]  by deleting the word “his”, and substituting the word “the” in its stead.

[6]      Mr Stewart has not filed a formal notice of opposition, but he has opposed any suggestion that I can amend the judgment as suggested.  Further, he has filed an appeal to the Court of Appeal, and the judgment has been sealed at his request.

Submissions

[7]      Mr Parmenter submits that I have jurisdiction to correct [60] of my judgment pursuant to r 11.10 of the High Court Rules, and that that jurisdiction can be invoked whether or not the judgment has been sealed.

[8]      Mr Stewart argues that I do not have jurisdiction to amend the judgment; first because a sealed judgment disbars the application of rule 11.10, secondly because the proposed amendment would alter quantum and therefore the substance of the judgment, thirdly because the issue as to what shares were the subject of the agreement is still live and should be determined at the quantum hearing, and finally because I am functus officio.

Does [60] Express What Was Decided and Intended?

[9]      I am quite clear what I intended to do.  The relevant paragraph in [60] should have recorded my conclusion that Mr Teat agreed to transfer 50 per cent of “the” shares in G.B. Teat Limited to Mr Willcocks at book value.

[10]     The  second  amended  statement  of  claim  recorded  that  Mr Teat  was  the majority shareholder in the company.   It was alleged that he agreed to transfer

50 per cent  of  the  shares  in  the  company  to  Mr  Willcocks.     The  case  for Mr Willcocks was opened and closed on the basis that the claim was for 50 per cent of the shares in the company.  I refer to [36] in Mr Parmenter’s opening, and [1] and [28] in his closing address.  In contrast, Mr Stewart for Mr Teat made no reference to the proposition that any agreement  was in  respect of 50 per cent of Mr Teat’s

majority shareholding only, as opposed to 50 per cent of the company’s shares. Indeed, at [7] in his closing submissions, he noted that the onus was on Mr Willcocks to establish that Mr Teat agreed to sell him 50 per cent of the shares in the company on the terms set out in the second amended statement of claim.  There was a similar reference to 50 per cent of the shares in the company at book value in [26] and in [56], and he referred to the improbability of Mr Teat agreeing to sell 50 per cent of his company to Mr Willcocks.

[11]     That is also clear from a number of paragraphs in my interim judgment that I was dealing with the issue of whether Mr Teat had agreed to sell 50 per cent of the shares in the company.  I refer to the following:

(a)      In [1] and [3(a)], I addressed the fundamental question that I was required to answer — did Mr Teat and Mr Willcocks enter into an oral agreement in or around September 1999 whereby Mr Teat agreed inter alia, to transfer 50 per cent of the shares in G.B. Teat Limited to Mr Willcocks?

(b)I made it clear in [1] and [5] that Mr Teat was the principal and not the sole shareholder in the company.

(c)       In [17] of the judgment, I outlined Mr Willcocks’ claim, and I noted at

[17(b)] his assertion that Mr Teat had agreed that he would transfer

50 per cent of the shares in the company to him.

(d)In [24] of the judgment, I noted that Mr Teat had transferred some of the shares to a trust for his son, Ben, in 2005, but that Mr Willcocks was not concerned because Mr Teat still had sufficient shares left in his own name to transfer a 50 per cent interest in the company to him.

(e)      In [31] of the judgment, I noted that the onus was on Mr Willcocks to establish on the balance of probabilities that Mr Teat agreed to sell him 50 per cent of the shares in G.B. Teat  Limited on the terms detailed earlier in the judgment.

(f)      In [33] of the judgment, I recorded that I was satisfied that Mr Teat agreed, in or about September 1999, to sell Mr Willcocks 50 per cent of the shares in G.B. Teat Limited at their book value.

(g)In [42] of the judgment, I recorded my conclusion that Mr Teat was to transfer to Mr Willcocks 50 per cent of the shares in the company at book value.

[12]     In my view, it is clear what I intended.  The expression “his” shares used in [60] should be “the” shares.  It is no longer a live issue which needs to be resolved at the quantum hearing.

[13]     The question now is whether or not I have jurisdiction to give effect to that intention under r 11.10.

Rule 11.10

[14]     Once a judgment is given, it cannot generally be amended or modified in any manner, and the trial Judge is functus officio once his or her decision has been finally recorded or overtaken by processes in a superior Court.[1]

[1] Milson v Carter [1893] AC 638 at 640; Crewe v Crewe [1921] NZLR 769.

[15]     Rule 11.10 is, however, an exception to this finality rule.  Relevantly, the rule provides as follows:

Correction of accidental slip or omission

(1)     A judgment or order may be corrected by the court or the Registrar who made it, if it—

(a)     contains a clerical mistake or an error arising from an accidental slip or omission, whether or not made by an officer of the court;

or

(b)     is drawn up so that it does not express what was decided and intended.

[16]     Under the rule, the Court has power to correct a judgment which contains a clerical mistake, or an error arising from an accidental slip or omission.  It can also correct a judgment that is drawn up in such a way that it does not express what was decided and intended.  The rule codifies the Court’s inherent jurisdiction to correct slips, or to vary its own orders, to make the meaning and intention of the judgment

clear.[2]

[2] Redcliffe Forestry Venture Ltd v Commissioner of Inland Revenue (2010) 24 NZTC 24, 079 at [12]. 

[17]     What is sought to be corrected must be the result of a slip or a failure to express what was decided and intended.   The rule cannot be used, for example, where there is subsequently found a more convenient form of order.[3]   Nor may it be invoked to vary an order in a fundamental way,[4] or be used by a litigant to improve a

[3] BNZ v Mulholland [1991] 4 PRNZ 299 at 302.

[4] R v Cripps ex parte Muldoon [1983] 3 All ER 72 at [78].

judgment that has been obtained.[5]

[5] Broadview Investments Co Pty Ltd v Corporate Interiors (NZ) Ltd HC Wellington CP123/92, 12 August 1998. 

[18]     Does the position change once the judgment is sealed?  The traditional view has been that once a judgment is sealed, it is no longer subject to recall on the basis that the Court is functus officio, at least when the effect of the change is to modify or change the effect of the determination.[6]

[6] Nimmo v Westpac Banking Corporation [1994] 1 NZLR 472 at 478; Nakhla v McCarthy [1978] 1 NZLR 291 at 296.

[19]     The  inherent  jurisdiction  was  not  so  constrained.[7]      Rule  11.10  does  not expressly provide that  a judgment cannot be corrected  after it has been sealed. Indeed, there is no express provision defining when the power may be exercised. This is in contrast to r 11.9 which provides that a Judge may recall a judgment at any time before a formal record of it is drawn up and sealed.

[7] Milson v Carter [1893] AL 638 at 640.

[20]     Further, there have been a number of cases where the Courts have invoked r 11.10, or its predecessor (r 12) to amend sealed judgments.  These decisions have allowed, among other things, the correction of mathematical or calculation errors,

incorrect dates, increased GST or interest rate charges,[8]  the omission of expert or

[8] Findlay v Auckland City Council (No 2) HC Auckland CIV 2009-404-6497, 11 November 2010.

Court fees, the wording of discovery orders,[9] and the adding of more specific detail

[9] Body Corporate 34486 v E-Gas Ltd HC Wellington CIV 2007-485-2168, 28 September 2010.

as to whether “radius cap clips” were a breach of patent.[10]

[10] Broadview Investments Co Pty Ltd v Corporate Interiors (NHZ) Ltd HC Wellington, CP 123/92, 12 August 1998. 

[21]     In  Nomoi  Holdings  Limited  v  Elders  Pastoral  Holdings  Limited,[11]   the Court of Appeal acknowledged that there had been an error in ordering costs on the basis of a one-day hearing, when the hearing had been held over two days.   The Court accepted that the error should be corrected under the slip rule.  Similarly, in Nash v Nash,[12] the Court observed that the practice of correcting slips or omissions in sealed judgments was well-established.

[11] Nomoi Holdings Limited v Elders Pastoral Holdings Limited (No 2) CA79/00, 3 September 2001. 

[12] Nash v Nash CA 338/92.

[22]     Few  judgments  have explicitly addressed  the operation  of  r  11.10  or  its predecessor rules in relation to sealed judgments.  The issue was touched on in the following:

(a)      In Gairloch Holdings Limited v Tullimore Investments Limited,[13]  the Registrar quantified costs in accordance with a schedule provided by the plaintiff.  He did not give the defendant the opportunity to make submissions on the same.  The plaintiff’s schedule was put in a Court order and was sealed.  The defendant then sought review of the order. Gendall AJ  considered  various  authorities  and  concluded  that  the Registrar’s costs order could be rectified on two alternative grounds, either because the defendant did not receive the opportunity to be heard and the costs order was therefore a nullity, or alternatively, because the costs order contained an error that could be corrected pursuant to the slip rule in r 11.10.

[13] Gairloch Holdings Limited v Tullimore Investments Limited HC Wellington CIV 2010-485-295, 16 September 2010.

(b)      In Bank of Nakhodka v The Ship Abruka,[14] the Court queried whether

[14] Bank of Nakhodka v The Ship Abruka HC Auckland AD763/96, 28 May 1997.

or not it could review a Registrar’s order, once it had been sealed.

Patterson J referred to various authorities, and concluded that where a judgment had been perfected by sealing, and it accurately expressed the true intention of the Court, it could not be set aside or varied on the grounds that it was erroneous.

(c)      In Steel v Bruce County Council,[15] the Court held that after sealing, a judgment could be amended so as to make it conform with the Judge’s true intention, but that it could not be amended if it expressed the true intention of the Court at the time it was delivered.

[15] Steel v Bruce County Council HC Dunedin M237/83, 26 February 1986.

(d)In Allan Scott Wines & Estates Holdings Ltd v Lloyd,[16]  Miller J was considered the District Court equivalent of what was then r 12 of the High Court Rules.   His Honour noted that the rule did permit amendment of a judgment after sealing.   He observed that the rule permitted correction of an error only in three defined circumstances first  where  it  contained  a  clerical  mistake;  secondly,  where  it contained an error arising from an accidental slip or omission, and thirdly where the judgment or order was so drawn as to not express what was actually decided and intended.  His Honour considered that in each case, the Court has jurisdiction to correct the error, and that the rule envisages that the judgment can be amended.

[16] Allan Scott Wines & Estates Holdings Ltd v Lloyd  (2006) 18 PRNZ 199.

[23]     In my view, it is clear that the Court does have jurisdiction to correct an accidental slip or omission in a judgment, notwithstanding that the judgment has been sealed.  It can also amend a sealed judgment which does not express what was decided and intended.

Result

[24]     I have recorded above that [60] of the judgment does not express what was decided  by  me  and  what  I  intended.    The  judgment  as  it  currently  stands  is

ambiguous and in my view, requires correction.  Accordingly, I direct that [60] be

amended by deleting the word “his” and substituting therefore the word “the”.  The

corrected paragraph should read as follows:

I have concluded that the parties did enter into an oral agreement in or about September 1999, and that Mr Teat agreed to transfer 50 percent of the shares in G.B. Teat Limited to Mr Willcocks at book value. Further, in my view, that agreement was not subsequently varied. If I am wrong in that regard, in my judgment any additional term requiring that the parties should first work together to see whether they get along was either fulfilled, or waived.

Costs

Mr Parmenter on Mr Willcock’s behalf seeks indemnity costs.  Mr Stewart has not replied to that application.  In my view, an order for costs in favour of Mr Willcocks is appropriate.  I reserve any finding as to quantum until I have heard the parties in relation to that issue.   I will deal with costs in their totality when the hearing is resumed.

Further Order

[25]     The  parties  have  been  unable  to  reach  agreement  as  to  the  quantum  of damages following from my interim judgment.  I direct the Registrar to liaise with counsel and to allocate a fixture so that the matter may be concluded as soon as shall be reasonably practicable.  I cannot see that more than two days will be required.  If the parties want the balance of the proceedings to be transferred to Auckland, they

should file memoranda in that regard.

Wylie J