Work v IAG New Zealand Limited
[2022] NZCA 336
•25 July 2022
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA170/2022 [2022] NZCA 336 |
| BETWEEN | PETER ALLAN WORK AND ROBYN MARGARET WORK |
| AND | IAG NEW ZEALAND LIMITED |
| CA293/2022 | ||
| BETWEEN | PETER ALLAN WORK AND ROBYN MARGARET WORK | |
| AND | IAG NEW ZEALAND LIMITED | |
| Court: | Miller and Dobson JJ |
Counsel: | G J Jones and J Heatlie for Applicants |
Judgment: | 25 July 2022 at 11.00 am |
JUDGMENT OF THE COURT
AThe applications for leave to appeal are declined.
BThe respondent is entitled to one set of costs for a standard application on a band B basis, with disbursements for both applications.
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REASONS OF THE COURT
(Given by Miller J)
The Works seek leave to appeal several interlocutory decisions of the High Court.[1] The first is a judgment of Johnston AJ given on 22 November 2021 in which he declined to order:[2]
(a)that IAG pay wasted costs of $130,746.71 in respect of a failed judicial settlement conference that the Associate Judge had conducted; and
(b)that will-say statements tendered by expert witnesses for IAG at the settlement conference be admitted in evidence at the trial.
[1]Senior Courts Act 2016, s 56(5).
[2]Work v IAG New Zealand Limited [2021] NZHC 3058 [Decision of Johnson AJ].
The second and third judgments were given by Lester AJ. In the first, delivered on 8 March 2022, he declined to recall the 22 November decision of Johnson AJ and also declined leave to appeal.[3] He awarded IAG costs on the 22 November decision and wasted costs of preparation for the trial, which was to commence on 8 February 2022 but was adjourned at the Works’ request.[4] (It is now scheduled for February 2023.) The sum awarded, on a scale basis, for wasted costs was about 10 per cent of IAG’s preparation costs, calculated at 2B scale,[5] which totalled $15,054.39. In his second judgment, delivered on 27 May 2022, he rejected a claim that he had failed to deal with the application for leave to appeal so far as it concerned the issue whether the will-say statements could be used in evidence at trial.[6] He declined leave to appeal on that issue too.[7]
[3]Work v IAG New Zealand Limited [2022] NZHC 380 [First decision of Lester AJ].
[4]At [63] and [74].
[5]At [79].
[6]Work v IAG New Zealand Limited [2022] NZHC 1201 [Second decision of Lester AJ].
[7]At [13].
It will be seen that the judgments of Lester AJ are consequential upon that of Johnston AJ. The Works propose to appeal the whole of the decision of 22 November. They also seek an order for stay of their own proceeding, alleging that the outcome of this appeal will be material to the conduct of the trial, and a stay of execution of the costs award made by Lester AJ. They previously sought, but do not pursue, a direction that IAG be required to participate in another settlement conference.
The subject matter of the proceeding is an insurance claim for the destruction, by fire on 23 November 2013, of a property owned by the Works and insured by IAG. IAG alleges that it was destroyed by arson and that Mr Work was the arsonist. It claims he ignited the fire by switching on a lamp the head of which had been laid on combustible materials. Its pleaded claim is that he did so by remotely instructing a printer to print a piece of paper that had been attached with cellotape to the lamp’s contact switch.
Both parties engaged expert witnesses. The experts provided will-say statements for the settlement conference. The Works say that those of IAG’s experts, Russell Joseph and Simon Cox, were dishonest. The allegation is also said to potentially implicate IAG and its lawyers.[8] The allegation concerns two hand-soldered electrical resistors which Mr Cox initially said he found in a charred mass comprising the remains of the lamp holder. The resistors were not part of the lamp. The Works’ experts responded that the resistors had not been subjected to a fire. Mr Cox amended his statement to say that they were in the exhibits bag sent to him containing the lamp’s remains; they were with rather than in the black mass. He corrected his statement at the settlement conference.
[8]First decision of Lester AJ, above n 3, at [17].
Johnston AJ found himself quite unable to find that some combination of IAG, its advisors and its experts acted dishonestly at the settlement conference. He noted that the conference was held on a confidential and without prejudice basis.[9] In any event, he was in no position to reach such a conclusion. The question whether IAG’s experts falsely offered evidence to boost IAG’s case was a trial issue.[10] Even if the issues could be determined at this stage, the Judge was not persuaded that IAG’s experts acted dishonestly.[11] Should the Works succeed at trial they could claim costs, including costs relating to the settlement conference.[12] He rejected an argument by Mr Jones, for the Works, that IAG’s counsel advanced an unsustainable argument as to the effect of a recent precedent and this somehow warranted an award of costs; there was no reason to think counsel had knowingly misled the Court.[13]
[9]Decision of Johnston AJ, above n 2, at [18].
[10]At [26].
[11]At [20]–[26].
[12]At [30].
[13]At [27]–[28].
In his first judgment, Lester AJ declined leave to appeal on a number of grounds, relevantly including the impossibility of deciding, on the record, that IAG’s experts acted dishonestly.[14]
[14]First decision of Lester AJ, above n 3, at [43].
An allegation of arson is extremely serious. But that does not justify what appears on the face of it to be the Works’ attempt to obtain leverage against IAG before trial. The applications for leave to appeal are ill-advised.
The reason is that the question whether the will-say statements of IAGs experts can be used to impeach them at trial ultimately must be decided by the trial Judge, as Johnston AJ pointed out.[15] It need not be decided now. It would be highly inadvisable to do so at an interlocutory juncture even in the very unlikely event that this Court were to think it possible to make such findings on the record available.
[15]Decision of Johnston AJ, above n 2, at [26].
That is sufficient to dispose of the two applications for leave to appeal. The claim for wasted costs of the settlement conference rests primarily on the assumption that the experts were dishonest. We make two further points about the claim for costs. First, if they succeed at trial the Works will presumably be entitled to costs in connection with the conference. Second, to sheet liability for additional costs home to IAG the Works will likely be required to show not only that the experts were dishonest but also that they caused wasted costs notwithstanding that the will-say statements were corrected at the conference, and further that IAG was complicit in some way in their dishonesty.
Finally, it necessarily follows that the applications for leave to appeal cannot succeed so far as they concern liability for IAG’s costs. Whatever the ultimate outcome at trial, there was no merit in the attempt to have the High Court make findings of dishonesty at this juncture. Johnston AJ was right to describe the attempt as misguided.[16] Whether enforcement should be stayed pending trial is a matter for the High Court.
[16]Decision of Johnston AJ, above n 2, at [26].
For these reasons the applications for leave to appeal are declined. IAG is entitled to one set of costs for a standard application on a band B basis, with disbursements for both applications.
We record, for the avoidance of doubt, that we should not be taken to suggest the trial Judge ought to accede to an application to make use of the will-say statements. They are apparently privileged, meaning that the Works would have to surmount s 67 of the Evidence Act 2006. They would be used not to contradict the witnesses — who apparently will not claim at trial that the resistors were in the lamp — but to cast doubt on their veracity. That being so, their probative value is limited even if it can be shown that the experts did not act in good faith. The High Court would need to hear oral evidence about the circumstances of their investigations, as Johnston AJ observed.[17] The Judge might not find the evidence substantially helpful,[18] or might not be persuaded that its probative value justified the time and cost of adducing it.[19]
[17]At [23]–[24].
[18]Evidence Act 2006, s 37.
[19]Section 8.
Solicitors:
Wotton + Kearney, Wellington for Respondent
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