Work v IAG New Zealand Limited
[2020] NZHC 1870
•30 July 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-404-1267
[2020] NZHC 1870
BETWEEN PETER ALLAN WORK and ROBYN MARGARET WORK
PlaintiffsAND
IAG NEW ZEALAND LIMITED
Defendant
Hearing: 24 July 2020 Appearances:
G Jones for the plaintiffs
C Stevens and H Stanford for the defendant
Judgment:
30 July 2020
JUDGMENT OF ASSOCIATE JUDGE JOHNSTON
[1] On 23 November 2013 a residential property owned by the plaintiffs in Wellington was damaged or destroyed by fire. On 27 June 2019 the plaintiffs commenced this proceeding against the defendant, their insurer, under a contract of insurance claiming the indemnity value of the house and various other heads of damage. The total claim is for more than $800,000 plus interest and costs.
[2] The defendant denies liability inter alia on the basis that the fire was commenced deliberately by the plaintiffs — or, rather, the first-named plaintiff, Mr Work. This denial is pleaded as an affirmative defence in the defendant’s amended statement of defence dated 6 December 2019. For ease of reference I set out the pleading:
19The policies expressly exclude cover for any loss that is caused intentionally by the insured.
WORK v IAG NEW ZEALAND LIMITED [2020] NZHC 1870 [30 July 2020]
20The fire was intentionally caused by one of the plaintiffs, Mr Work.
Particulars
20.1Mr Work used remote access computer software installed on his laptop to remotely access a printer located at the property.
20.2Mr Work had prepared a piece of paper in the printer with cellotape attached.
20.3When he printed the paper, and cellotape pulled through the contact on the switch turning the standard lamp on, which ignited the fire.
21Mr Work had the motive, means and opportunity to cause the fire, and did so. Further particulars will be provided following discovery, but include:
Particulars
Motive
21.1The plaintiffs were in severe financial difficulty. They had very limited income, large debts and unmet tax liability, and their two houses were highly leveraged to ASB Bank plus they had second tier borrowing from Finance Now Limited.
21.2Having received a notice to rectify from Wellington City Council, the Works had substantial code compliance costs for maintenance work on the property. The back wall of the property was also starting to leak.
21.3The Works had tried to sell the property, but had been unsuccessful.
21.4The tenants in the property had moved out due to infighting and it was unlet[.]
21.5Mr Work was struggling with his mental health and alcohol consumption.
21.6On the Thursday before the fire, the Works shifted their remaining personal effects of value out of the house.
21.7Shortly after Mr Work sent the print command which caused the fire, the LogMeIn entries were deleted.
Means
21.8Mr Work had the necessary computing and electrical knowledge to cause the fire.
21.9He built his own multiboard that was being used in the room of origin.
21.10The only power left on at the property was a small sub-main in the downstairs converted garage where the fire originated.
21.11The power was reconnected at a time unknown to us but two or three weeks prior to the fire.
21.12The sub-main provided power to a single desk lamp and a second power extension went to the homemade multiboard which enabled power to a standard lamp and a computer, printer and a PC webcam that looked into the room[.]
21.13All of the power in the house had been turned off except for the relevant sub-circuit used for the lamps, computer, printer, webcam and lamp setup.
21.14Mr Work admits that on the night of the fire, he turned on the standard lamp (in the room of origin) by printing a piece of paper. He explained to investigators that it had a piece of cellotape on the end of it which pulled through the contact in the multi-board, turning the standard lamp on.
21.15He admits he was watching the property through the webcam on the night of the fire, and that he saw the light go on when he printed the document.
21.16Contrary to Mr Work’s advice Police photographs show that there were combustibles around the standard lamp.
21.17An upstairs exterior door, the interior doors and the door to the basement void (in the room of origin) were all left open.
21.18The pinex ceiling tiles in the room of origin had been removed.
Opportunity
21.19Tenants were no longer living at the property.
21.20Mr Work had been at the property the Thursday before the fire. The fire occurred on the Saturday.
21.21At about 10:44pm, Mr Work logged into his remote access software and activated the printer causing the standard lamp to be activated. The fire service was called to a fire at the property at 11:02pm.
21.22At about 10:53pm Mr Work logged back on again so he could watch the fire until the power at the property failed.
[3] The plaintiffs apply for an order that the defendant particularise this pleading. Their interlocutory application is dated 4 June 2020. It seeks orders in these terms:
1The plaintiffs, Peter Work and Robyn Work, will on 14 July 2020 at 10am apply to the Court for orders:
(a)Requiring the defendant to file and serve a more explicit statement of defence particularising:
(i)the precise manner in which the fire ignited including all relevant circumstances and descriptions prior to, at the time of, and following the ignition;
(ii)the time at which the fire ignited;
(iii)the acts alleged to have been carried out by Mr Work in order to ignite the fire; and
(iv)the sequence alleged of the events that lead from Mr Work’s alleged act to the ignition of the fire.
(b)If the defendant’s case that the fire was intentionally caused by Mr Work is to be established by inference, the plaintiffs require the defendant to particularise with reference to those matters above at 1.1(a)-(d):
(i)The particular fact or conclusions to be established by inference; and
(ii)The facts and/or circumstances from which the inference is to be drawn.
(c)If the defendant’s case is to be established by a combination of direct evidence and inference, the plaintiffs require the defendant to particularise with reference to the matters referred to above in 1.1(a) and (b):
(i)The facts to establish by direct evidence;
(ii)Particular facts or conclusions to be established by inference; and
(iii)The facts and circumstances from which the inferences in 1.3(b) are to be drawn.
(d)Does the defendant rely on any matters additional to those pleaded in paragraphs 21.1 to 21.22 of its amended statement of defence in support of its allegation that the plaintiffs started the fire intentionally.
(e)At paragraphs 6.2 and 13.1 of the defendants amended statement of defence dated 6 December 2019, the defendant also alleges the fire was intentionally caused by Mr Work. The plaintiffs assume that the acts relied upon by the defendant in order to establish that the fire was caused intentionally by Mr Work are the same acts as relied upon in support of the allegation in paragraph 20 of the amended statement of defence, which is that that [sic] the fire was intentionally caused by Mr Work. If this is not the case, the plaintiff requires the defendant to particularise the allegations
at paragraphs 6.2 and 13.1 in the same manner as requested above at 1.2(a) and (b), and 1.3(a)-(c).
[4] The plaintiffs’ application is not the first occasion on which they have raised the question of the particularisation of the defendant’s first affirmative defence. It was originally raised during the course of a case management conference on 20 March 2020. My minute of that conference records the terms in which Mr Jones, for the plaintiffs, articulated their concern, and then sets out a series of directions that were in the end made by consent:
[12]I make the following directions:
(a)The defendant’s solicitors are to write to the plaintiffs’ solicitors describing the proposed testing, the process involved and the information that the defendant’s expert expects to obtain:
(b)The plaintiffs’ solicitors are to arrange to get the items in question (which Mr Jones assures me remain in existence) to the defendant’s solicitors forthwith;
(c)The defendant’s solicitors are to arrange to forward these to their expert (based, as I understand it, in South Australia), forthwith;
(d)The defendant’s expert is to be asked to carry out the proposed testing and, having done so, return the items to the defendant’s solicitors;
(e)As soon as the testing has been completed and the defendant’s solicitors have to hand their expert’s report the defendant’s solicitors are to inform the plaintiffs’ solicitors of any additional particulars of the defendant’s affirmative defence which should be provided having regard to the outcome of that testing.
[5] Not long after that the Covid-19 pandemic struck and as a result the implementation of those steps has been delayed and indeed is only now close to completion.
[6] The parties have sought a judicial settlement conference and have both expressed confidence that at such a conference genuine progress can be made towards a resolution of the dispute. A date has been allocated for this. It is set down for 24 November 2020.
[7] In those circumstances, the plaintiffs’ election to press ahead with this application, before the defendant has had an opportunity to consider whether it needs to replead, and there being ample time before the judicial settlement conference, was described by Mr Stevens, for the defendant, as premature. It is hard to disagree. Nevertheless, the plaintiffs are entitled to insist on their application being dealt with.
[8] The purpose of pleadings in civil litigation is to identify, and delineate the scope of, the issues for determination — the four corners of the case as it were. In principle a party should not, at trial, lead evidence that goes beyond the scope of its case as pleaded. In practice, of course, the imprecise nature of language and the unpredictability of the trial process mean that the line between what has or has not been put in issue in the pleadings is not always easy to draw. The Court’s responsibility at trial is to ensure that the trial proceeds fairly, so that if the case takes an unexpected turn with the result that one of the parties is confronted with a claim or defence that it could not have predicted on the pleadings, either the relevant evidence will be excluded, or the party caught by surprise will be entitled to an adjournment.
[9] The basic requirements of pleadings are articulated clearly enough in the High Court Rules 2016. Rule 5.26 deals with statements of claim. It says that the plaintiff’s statement of claim:
(a)must show the general nature of the plaintiff’s claim to the relief sought; and
(b)must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff’s cause of action; and
…
[10] That rule relating to statements of claim applies equally to affirmative defences in which positive allegations are made against the plaintiff by the defendant, such as arson (see also rr 5.48(4) and (5) relating specifically to defences).
[11] The law reports are replete with detailed analyses of exactly what is required.1 Mr Jones referred me to a number of cases. In my assessment, the most helpful exposition is the Court of Appeal’s judgment in Price Waterhouse v Fortex Group Ltd.2 It is unnecessary to outline the facts of the case. I set out below the relevant passage from the judgment of McGechan J for the Court:
Pleadings
It has become fashionable in some quarters to regard the pleadings of being of little importance. There was an echo of that approach in the implicit suggestion floated in this case that exchange of briefs of evidence before trial might be seen as curing any lack of particularity in the pleadings. Any such view is misguided. Pleadings which are properly drawn and particularised are, in a case of any complexity, if not in all cases, an essential road map for the Court and the parties. They are the documents against which the briefs of evidence are or should be prepared. They are the documents which establish parameters of the case, not the briefs of evidence.
We are not casting aspersions on the pleadings in this case which, leaving aside issues about necessary particularity, are well drawn on each side. Nor are we advocating a pedantic approach to the topic. Pleadings should be read as conveying what they would reasonably convey, in the context of the case, to a sensible legal mind. Even less are we advocating prolixity of pleadings, or the raising of every conceivable cause of action irrespective of its potential for success; this type of pleading often contains the additional flaw of overlooking R114 which requires each cause of action to be separately pleaded. What we are saying is that both the Court and opposite parties are entitled to be advised of the essential basis of a claim or defence, and all necessary ingredients of it, so that subsequent processes and the trial itself can be conducted against recognisable boundaries. Neither the Court nor opposite parties should be placed in the position of having to deal with a proposition of whose substance adequate notice has not been given in the pleadings.
Statements of claim : Particularity : Principles
The principles are well enough known. Difficulties lie in application in marginal situations. This is one such situation.
The object of a Statement of Claim is to “state” the “claim”, so that the Court knows what it is to rule upon, and the Defendant knows the case which it must meet. As a matter of practicalities, this initial “statement” is not at the level of a full disclosure of all evidence and documentation. It is of course an abbreviated summary “statement” of the basic facts said to give rise to the claim, and of the relief which is sought.
It is the level at which such abbreviation is to be set which causes ongoing difficulties. There is, of course, an eternal tension between Plaintiffs who wish to keep content as wide and general as possible, allowing maximum room to
1 Andrew Beck and others McGechan on Procedure (online ed, Thomson Reuters) at [HR5.26.02]- [HR5.26.10] and [HR5.48.01]-[HR5.48.17].
2 Price Waterhouse v Fortex Group Ltd CA 179/98, 30 November 1998.
cover oversight and further developments, and Defendants who wish to narrow issues and impose restrictions to the maximum possible degree. Determinations, with respect, are not greatly assisted by very general labels such as pleading the “general” nature of matters claimed, or mantras such as “what not how”. While they grasp an idea, they afford little hard guidance. Nor, with respect, does it greatly help to talk in terms of “facts” (to be pleaded) and “evidence” (for trial) as if there were some bright-line distinction between the two. There is not. “Facts” can merge into “evidence” without any clear dividing line.
In marginal cases, it is better to avoid generalities and rules of thumb, and to return to principle. The pleader and Court simply ask “in the circumstances of his claim, is that statement sufficiently detailed to state a clear issue and inform the opposite party of the case to be met?”. This is not, under modern practice, simply some minimum which a Defendant needs so as to be able to plead. It is intended to supply an outline of the case advanced, sufficient to enable a reasonable degree of pre-trial briefing and preparation. Discovery and interrogatories are only an adjunct, not a substitute for pleading.
In the result and particularly in complex cases, a rather more detailed factual narrative has come to be required than was the case in earlier and simpler times. That does not require the full details which later will be contained in a brief of evidence. Nor does the modern requirement for pre-trial exchange of briefs dilute the earlier and differently based requirement for sufficiently particular pleading. What is required is an assessment based on the principle that a pleading must, in the individual circumstances of the case, state the issue and inform the opposite party of the case to be met. As so often is the case in procedural matters, in the end a common-sense and balanced judgment based on experience as to how cases are prepared and trials work is required. It is not an area for mechanical approaches or pedantry.
[12] The emphasis then is on ensuring that the pleading in question is sufficiently clear and detailed to inform the other party of the case which it has to meet, and enable that party to brief evidence in response and otherwise prepare for trial.
[13] Mr Jones submitted that special rules apply to cases in which there is an allegation of arson, presumably because of the highly technical nature of such cases, though he did not refer me to any authority for that proposition.
[14] Without doubt an allegation of arson is serious. As a result, a party alleging arson must accept that the civil standard of proof — on the balance of probabilities — will be calibrated at the upper end of the scale and the evidence will have to be compelling as explained by the Supreme Court in Z v Dental Complaints Assessment Committee:3
3 Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1 (footnotes omitted).
[102] The civil standard has been flexibly applied in civil proceedings no matter how serious the conduct that is alleged. In New Zealand it has been emphasised that no intermediate standard of proof exists, between the criminal and civil standards, for application in certain types of civil case. Balance of probabilities still simply means more probable than not. Allowing the civil standard to be applied flexibly has not meant that the degree of probability required to meet this standard changes in serious cases. Rather, the civil standard is flexibly applied because it accommodates serious allegations through the natural tendency to require stronger evidence before being satisfied to the balance of probabilities standard.
[15] But I reject the submission that from a pleadings perspective arson is a special case; the same rules apply.
[16]That brings me to the particular orders that the plaintiffs seek.
Item 1(a)(i)
[17] The plaintiffs wish the defendant to state, “the precise manner in which the fire ignited”.
[18] During the course of argument Mr Jones explained that what is sought is detail as to how the remote switching on of the standard lamp led to the fire. His submissions included a tabular analysis from which I infer that what is sought is a level of detail right down to the nature of any material that is said to have been in close proximity to the bulb and the process by which the bulb set such material alight.
[19] The defendant has pleaded exactly how it says that the plaintiffs were able remotely to switch on the standard lamp (in paragraphs 20.1–20.3).
[20] Its case is that it was the switching on of the standard lamp that caused the fire. It has pleaded that there was combustible material in close proximity to the standard lamp bulb (in paragraph 21.16). The defendant’s position, as matters stand, before receiving its expert’s report, is that it does not know — and indeed may never know
— the precise nature of that combustible material. It says that it can say no more about how — from a scientific perspective — the switching on of the standard lamp resulted in that combustible material igniting.
[21] I pause at this stage to refer again to my minute of the case management conference on 20 March 2020. During the course of that conference Mr Stevens offered an assurance that, if, as a result of the defendant obtaining its expert’s advice, it becomes apparent that it can provide further information in its pleadings it will do so.
[22] In my judgement, the defendant has in its defence included sufficiently detailed information to make it quite clear that what it is putting in issue is whether the plaintiffs deliberately contrived to set fire to their own property and that their claim against the defendant is fraudulent, and provided as much detail as to how they are said to have done so as it has available to it at this stage. As a result, it seems to me that the plaintiffs have been informed of exactly what case they have to meet and that there is no danger of them being surprised at trial. What the plaintiffs are asking for goes well beyond the requirements of pleadings. In effect they are asking for the defendant’s evidence. Of course they will get this in due course. Indeed, in this case, because there is to be a judicial settlement conference, they will get this, at least in a truncated form, earlier than would usually be the case. However, in the end, my judgement is that the plaintiffs are not entitled to any further particularisation as to “the precise manner in which the fire ignited”.
Items 1(a)(ii)–(v)
[23] As to these aspects of the application, I find it difficult to imagine how the defendant could have been more particular in its pleading. It is implicit in the defendant’s pleadings that it alleges that the fire started sometime between 10.44pm and 11.02pm on 23 November 2013, so within an 18-minute period.4 The defendant’s pleading describes exactly how it says Mr Work acted to start the fire. In doing so it describes the sequence of events. The particulars sought in 1(a)(v) seem in the end to be a repetition of the request in 1(a)(i).
[24]I decline to order the defendant to provide the further particulars sought.
4 See above at paragraph 21.21 of the defendant’s amended statement of claim at [2].
Items 1(b)(i) and (ii) and (c)(i)–(iii)
[25] In these particulars, the plaintiffs effectively ask the defendant to identify what aspects of its case the defendant intends to attempt to prove by direct evidence and in respect of what aspects it will be asking the Court to draw inferences.
[26] In my view, this is not the proper subject of a request for particulars. The answer in this case — as it is in every case — is that the defendant has made certain allegations of fact and it will rely on a combination of what it can prove by direct evidence as to those facts and what inferences it can legitimately ask the Court to draw on the evidence as a whole. To ask the defendant to parse its pleading neatly into those allegations in respect of which it believes it will be able to prove by various means is, in my view, going too far. I decline to make any of the orders sought.
Item (1)(d)
[27] This is less a request for particularisation and more in the nature of an interrogatory. Whatever its characterisation, it is not in my view a proper question. The defendant is obliged to plead its case and must do so with sufficient particularity properly to enable the plaintiffs to understand the case against them. If the defendant has not pleaded a critical matter, then, as described earlier, it will not be entitled to call evidence in respect of it without leave, and then only if the plaintiffs will not be prejudiced.
[28] It is for the defendant to determine the facts that it will plead and on which it will rely. It is not obliged to offer assurances that it will comply with its obligations not to call evidence going beyond the four corners of the case that it has pleaded.
Item (e)
[29] This calls into question the technique employed by the defendant in pleading its case. The defendant has, in the paragraphs identified, referred to and said it will rely on, facts clearly pleaded elsewhere in its defence. This is a legitimate technique and I see no proper basis upon which the defendant could be ordered to approach matters otherwise.
[30]I decline to make the order sought.
Conclusion
[31]I decline to make any of the orders sought by the plaintiffs in their application.
[32] That leaves only the matter of costs. The plaintiffs have been unsuccessful in their application. My preliminary view is that the defendant is entitled to costs on this application on a 2B basis. I expect that counsel will be able to resolve costs issues. However, if they are unable to do so, they may come back by memoranda in the usual way and I will deal with costs on the papers.
Associate Judge Johnston
Solicitors:
Rainey Law, Auckland for plaintiffs DLA Piper, Wellington for defendant
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