AIR NEW ZEALAND LIMITED V AIR NIUGINI LIMITED HC AK CIV-2009-404-3460

AIR NEW ZEALAND LIMITED V AIR NIUGINI LIMITED HC AK CIV-2009-404-3460 [7 September 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2009-404-3460[2012] NZHC 2306BETWEEN AIR NEW ZEALAND LIMITEDPlaintiffAND AIR NIUGINI LIMITEDDefendantHearing: 6 September 2012Counsel: NS Gedye for plaintiffSA Barker and PJ Niven for defendantJudgment: 7 September 2012JUDGMENT OF ASSOCIATE JUDGE FAIRE[on application for further particulars]This judgment was delivered by me on 7 September 2012 at 2:30pmpursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Air New Zealand, Private Bag 92 007, Auckland 1142Buddle Findlay, PO Box 2694, Wellington 6140ContentsThe application .....................................................................................................................3The relevant High Court Rules ..............................................................................................3Amendments to the pleadings and the current statement of defence ...............................4The opposition ......................................................................................................................4Background ...........................................................................................................................5The counterclaim ..................................................................................................................6The Court's approach to an application for an order for particulars of defence .................7The application analysed ......................................................................................................9Paragraph 5 .................................................................................................................9Paragraphs 7, 8 and 10 ..............................................................................................10Paragraphs 41.1 to 41.5.............................................................................................10Paragraphs 66(c), 102, 248(n) ...................................................................................10Paragraph 77 .............................................................................................................11Paragraph 77.12 ........................................................................................................11Paragraph 94(b) .........................................................................................................11Paragraph 99 .............................................................................................................11Paragraph 246(e) .......................................................................................................11Paragraphs 105 and 108 ............................................................................................11Paragraph 117 ...........................................................................................................12Paragraph 225 ...........................................................................................................12Paragraph 226 ...........................................................................................................12Paragraph 246(c) .......................................................................................................12Paragraph 248(p) .......................................................................................................12Paragraph 248(t)........................................................................................................13Paragraph 248(u) .......................................................................................................13Paragraph 248(v) .......................................................................................................13Paragraph 249(e) .......................................................................................................13Order for filing and service of amended pleadings ............................................................13Discovery ............................................................................................................................14Costs ...................................................................................................................................15The application[1] The defendant applies for an order that the plaintiff provide further particulars in respect of the statement of defence the plaintiff has filed to thedefendant's third amended counterclaim.The relevant High Court Rules[2] High Court Rules 5.53 to 5.61 set the requirements which apply to pleadings when a defendant files a counterclaim. Rule 5.56(2) requires that a statement of defence to a counterclaim:must conform with the rules applying to statements of defence[3] Of importance in this application are rr 5.19 and 5.48. Rule 5.19 provides:5.19 Denial of contract(1) A bare denial of a contract will be treated as denying only the making of the contract in fact, and a party must specifically plead an assertion as to the legality or enforceability of a contract, whether with reference to section 24 of the Property Law Act 2007 or otherwise, or as to the interpretation of the contract advanced by that party.(2) A party asserting that a contract is illegal or unenforceable must plead the enactment or rule of law relied on.(3) A party asserting that the interpretation of a contract advanced by another party is wrong must assert its own interpretation.[4] Rule 5.48 provides:5.48 Requirements of statement of defence(1) The statement of defence must either admit or deny the allegations of fact in the statement of claim, but a defendant does not have to plead to an allegation that does not affect that defendant.(2) A denial of an allegation of fact in the statement of claim must not be evasive. Points must be answered in substance. If for example, it is alleged that the defendant received a sum of money, it is notsufficient to deny receipt of the particular amount. Rather, the defendant must deny receipt of that sum or any part of it, or set out how much was received. When a matter is alleged with circumstances it is not sufficient to deny it as alleged with those circumstances. In all cases a fair and substantial answer must be given.(3) An allegation not denied is treated as being admitted.(4) An affirmative defence must be pleaded.(5) The statement of defence must give particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances sufficient to inform the court, the plaintiff, and any other parties of the defendant's defence.Amendments to the pleadings and the current statement of defence[5] There has been considerable change to the pleadings since the defendant'sapplication was first filed. I do not intend to traverse the changes. What is important is that the Court now rules on the paragraphs in the statement of defence to the third amended counterclaim about which the defendant complains as to their adequacy.[6] The statement of defence to the third amended counterclaim is a considerable document compromising some 44 pages and 254 paragraphs. There is considerable detail in it. It contains a number of affirmative defences which are pleaded in paragraphs 241 to 254. The current application now calls for a consideration of some 63 questions raised. These were able to be reduced following the exchange of submissions. The result is that I was required to rule on 19 matters.The opposition[7] The plaintiff raises generally the following matters in opposition to the application. They are:(a) The Court has a discretion and should take into account issues of proportionality, balance and overall fairness in determining the application;(b) The plaintiff has given a sufficient outline of the case to enable the defendant to understand it and to enable a reasonable degree of pre- trial briefing and preparation;(c) The assessment which is required to be undertaken needs to be considered in light of a defence to a counterclaim which is already voluminous. The statement of defence already contains 44 pages and 254 paragraphs. The plaintiff says that its statement of defence to the counterclaim presents a highly detailed and informative picture of allsignificant elements in its answer to the defendant's case;(d) The defendant's request is an insistence on excessively refined pleadings, which are unnecessary and wasteful of costs and court time;(e) There is no misunderstanding of what the issues are and, in particular,what the plaintiff's response to the defendant's case is;(f) In some instances the defendant knows the facts and the plaintiff does not so that the defendant should give discovery before the plaintiff provides particulars; and(g) Where it responds to a negative assertion its purpose is simply to put the defendant to the proof.Background[8] The plaintiff is a New Zealand company which carries on business as an airline. The defendant is a company incorporated in Papua New Guinea and also carries on business as an airline. On 14 August 2002 the defendant leased a Boeing 767-317ER aircraft from Ansett World Aviation Netherlands BV, referred to in thepapers "AWAS". The defendant says that neither it, nor the Civil Aviation Authority of Papua New Guinea, referred to as "CAA PNG", had experience or capacity inrelation to this aircraft.[9] The plaintiff and the defendant entered into a contract for the plaintiff to provide all maintenance services for the aircraft exclusively, including work to place the aircraft in return condition at the end of the lease. There were two maintenance contracts entered into. The first is referred to as the maintenance services agreement("MSA"). That was in force while the aircraft was operated by the plaintiff under asublease, which applied until the aircraft was formally transferred across to the PNG register.[10] The second was an amended and restated maintenance services agreement, referred to as ARMSA, which came into force once the aircraft had moved on to the PNG register and was operated by the defendant.[11] The plaintiff filed this proceeding in June 2009. Its first cause of action alleged non-payment by the defendant of invoices totalling $541,493.76, issued pursuant to the ARMSA. The invoices related to maintenance and support which the plaintiff provided to the defendant in respect of the aircraft. I entered judgment for a part of the claim in the sum of $462,857.94 on 14 October 2009. I ordered that the balance of the first cause of action, which related principally to an invoice number 7300417 in the sum of $83,125, be resolved at trial. An indication had been given that a counterclaim was to be filed. That, in fact, was subsequently filed and is the basis for the current application.[12] Before leaving the plaintiff's claim it is appropriate to record that the amounts claimed in the plaintiff' second cause of action were paid before the summary judgment hearing. That left, apart from the one invoice that I have mentioned, only the question of interest and costs to be resolved in respect of theplaintiff's claim.The counterclaim[13] The defendant's counterclaim contains three causes.[14] The first cause of action alleges breach of the ARMSA and is summarised in the table of contents to the document as a claim for skimped performance andinvolves four paragraphs. No amount is specified in the prayer for relief. Advice is given that damages are to be determined at trial.[15] The second cause of action alleges breach of the ARMSA and, in particular, alleges failure to carry out work necessary to place the aircraft and records in the condition that they should have been at the time of the end of the lease. This is an extensive pleading and covers 152 paragraphs and some 47 pages of pleading in addition to the parts of the statement of counterclaim which are common to all causes of action. It seeks damages in the sum of US$711,800 and a further sum for damages, which it says are to be assessed at trial.[16] The third causes of action relates to the rectification of the Dent & Bucklechart, which shows all damage on the aircraft's skin, and which certifies that therepairs made of that damage was within allowable limits. This contains some 35 paragraphs and consists of approximately eight pages of pleading. The damages claimed are US$6,450.[17] There is a fourth cause of action which does not need to be analysed for the purposes of this application. Suffice to say, it contains pleadings covering approximately a page of the statement of counterclaim.The Court's approach to an application for an order for particulars of defence[18] Rule 5.48 sets out the general requirements that must be met in a statement of defence. The position relating to a denial in a pleading is set out in r 5.19. Both counsel referred to the leading authority, the Court of Appeal decision in Price Waterhouse v Fortex Group Ltd:1In marginal cases, it is better to avoid generalities and rules of thumb, and toreturn to principle. The pleader and Court simply ask "in the circumstancesof this claim, is that statement sufficiently detailed to state a clear issue andinform the opposite party of the case to be met?". This is not, under modernpractice, 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 to1 Price Waterhouse v Fortex Group Ltd CA179/98, 30 November 1998 at 19.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 detail 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.[19] Mr Barker raised an issue concerning affirmative defences and the position that arises where there is a denial of a negative allegation that implies a positiveallegation. He referred to the Court's analysis of this in Pinson v Lloyds & National Provincial Foreign Bank Ltd and to the three possibilities that arise.2[20] The first is a denial simply pointing the plaintiff to the proof, which means that the defendant is not entitled to raise any positive defence at trial. In that case no particulars are required.[21] The second is that the assertion in fact raises an affirmative allegation. If that is the purpose of the pleading, then particulars ought to be given.[22] The third involves a situation where there is some doubt as to whether the first or second position applies. If the position is truly embarrassing then the pleading should be struck out.[23] On a practical note, however, if the clarification of the pleading is possible so that any ambiguity is removed and the issue clearly defined, that ought to be ordered.[24] There is no need for me to analysis this position further in this case because in each area where the possible double negative applies Mr Gedye has confirmed in2 Pinson v Lloyds & National Provincial Foreign Bank Ltd [1941] 2 All ER 636.his submissions that the purpose of the pleading is to put the defendant to the proof. On that basis, there is no misunderstanding as to what the issue is.[25] The next general matter that needs some comment relates to those instances where a party cannot complete a pleading because the facts are within the opposingparty's knowledge and power. The Court of Appeal in Ross v Blakes Motors Ltdendorsed the comments of Bowen LJ in Millar v Harper 38 ChD 11 that in considering the exercise of this discretion:3"It is good practice and good sense that where the defendant knows the factsand the plaintiffs do not, the defendant should give discovery before theplaintiffs deliver particulars."[26] That theme was endorsed in Hickson v Scales.4 It follows from this analysis that if, in fact, the party which is required to provide the particulars knows the case then the Court should not delay the making of an order because that may have the effect of narrowing the issues upon which discovery is given.The application analysed[27] I proposed to counsel that I take their submissions as read and that I proceed on an issue-by-issue basis. I am grateful to them for their agreement on this approach. The process that was followed was that each counsel addressed on an issue followed by my recording the results with a short set of reasons. On completion of the exercise, counsel were invited to comment on any drafting matters in the summary that I had dictated. Corrections were then made.[28] I now set out the results I recorded in respect of the remaining issues. The headings are references to the paragraphs in the statement of defence.Paragraph 5No order is made. The plaintiff confirms its position is to put the defendant to the proof in respect of the lease.3 Ross v Blakes Motors Ltd [1951] 2 All ER 689 at 695.4 Hickson v Scales [1900] 19 NZLR 202 (SC).Paragraphs 7, 8 and 10No order is made. The plaintiff confirms its position is to put the defendant to the proof of the CAA PNG and CAA NZ and FAR rules. As a consequence, paragraph24(c) of the statement of defence is amended by deleting "and it says that it didcomply with all applicable CAA rules."Paragraph 41(b) is deleted.Paragraphs 41.1 to 41.5The intention of the pleading of the plaintiff to these paragraphs is to say that the plaintiff did comply with the requirements. No affirmative defence is relied upon. I record the example that I discussed with counsel which would require a pleading; that is that if there had been a waiver by the authority of compliance with a provision that is a matter that would call for a specific pleading.Paragraphs 66(c), 102, 248(n)In respect of paragraph 66(c), one possibility was advanced namely, that there be adeletion of the balance of the pleading starting with the words "and says it" to "and time consuming to meet".I discussed with counsel whether that would remove an issue as to whether there had been random, unreasonable and time consuming demands to meet. It seemed that it would not. In those circumstances, I consider that what demands that fall into this category were made, when they were made and by whom should be provided in the statement of defence.In respect of paragraph 102, the same applies in respect of this paragraph. I consider that what demands were the causes of the return date should be specified and by whom those demands were made and when they were made should be given and whether they were made to plaintiff and/or defendant.The same applies in respect of paragraph 248(n).Paragraph 77Counsel for the defendant confirms that no order need be made in relation to this paragraph.Paragraph 77.12Neither counsel was able to confirm to me at this stage whether documents exist concerning the closet bolt for the galley. I consider that this is one of those areas where the question of particulars should be delayed until discovery and inspection have been completed.Paragraph 94(b)In respect of the request for particulars relating to this paragraph my view is that the parties should complete discovery and inspection and that the matter should then be looked at after that stage. Accordingly, at this stage I do not order particulars in relation to paragraph 94(b).Paragraph 99In respect of this paragraph, the words "and says that the aircraft condition 4" in the statement of defence are struck out.Paragraph 246(e)The plaintiff shall provide particulars within its knowledge of demands made by the lessor upon the defendant and the plaintiff in relation to the reordering of records. These are to include when the demands were made and, if made in writing by what document, and, if made orally by which person.Paragraphs 105 and 108I do not order particulars here save to say that the plaintiff's position is a straightdenial of the allegation made in both paragraphs and it simply puts the defendant to the proof of the allegation.Paragraph 117No particulars are ordered in respect of this paragraph. I record that the words "and says that able to redelivered" are deleted from this paragraph of the statement ofdefence.Paragraph 225In relation to paragraph 225 of the statement of defence, the following words shall bedeleted "and says that Boeing until on 6 October 2007". On the basis that the plaintiff's denial simply puts the defendant to the proof no further particulars areordered. I record that should the plaintiff wish to raise a positive allegation in respect of this matter further particulars will need to be given.Paragraph 226In relation to paragraph 226 of the statement of defence, the following words shall bedeleted "and further says that fail to do so". On the basis that the plaintiff'sdenial simply puts the defendant to the proof no further particulars are ordered. I record that should the plaintiff wish to raise a positive allegation in respect of this matter further particulars will need to be given.Paragraph 246(c)The end of lease process in Hong Kong was carried out by HAECO under contract to the defendant. The plaintiff was not a party to the contract and had no direct responsibility for it. This is an appropriate case to reserve the issue of further particulars until after the defendant has given discovery and inspection has been completed.Paragraph 248(p)In respect paragraph 248(p), I order that the plaintiff provide particulars so that afterthe words "under the lease" in the first line particulars are given which refer to the specific provisions in the lease.The words "inter alia" in the third line of this subparagraph are deleted.I delete the words in paragraph 248(p)(ii) "in a preferred manner". I make no furtherorder for particulars in relation to this paragraph.Paragraph 248(t)I make no order for further particulars in relation to this paragraph. I consider there is sufficient particularisation to support the allegation that is made in the paragraph.Paragraph 248(u)I make no order for further particulars in relation to this paragraph. I have considered paragraph 248(u) of the statement in reply and consider that if there isany issue about what is meant by "good time" the facts are within the full knowledgeof the defendant.Paragraph 248(v)I make no order for further particulars in relation to this paragraph. In my view the issue has been sufficiently identified. There is no question that the defendant will be taken by surprise when evidence is led on the matter by this pleading.Paragraph 249(e)Counsel are agreed that I should defer this issue until after discovery.Order for filing and service of amended pleadings[29] The above summary requires amendments to the statement of defence to the counterclaim. The time for the filing and service of amended pleadings was settled with counsel. In terms of that I order:(a) An amended statement of defence incorporating the orders set out in [28] of this judgment to the third amended counterclaim shall be filed and served by 28 September 2012;(b) A reply in accordance rr 5.62 and 5.63 shall be filed and served by 19 October 2012.Discovery[30] There will be a telephone case management conference with counsel at 9am on 20 November 2012. Its purpose shall be to finalise discovery orders that may be required in the proceeding. I expect counsel to have conferred in terms of r 8.2 and to be in a position, prior to the conference, to propose the precise form of discovery orders that are required. I anticipate that counsel will be able to agree on tailored discovery. If counsel are unable to agree, memoranda shall be filed by each counsel by 13 November 2012 setting out the form of the discovery order required and the reasons for it. If counsel are able to agree on the form of discovery, or other appropriate arrangements in relation to it, a joint memorandum should be filed.[31] Should a joint memorandum be filed, counsel are asked to consider the timing of a future case management conference which would cover the following matters:(a) the issues requiring resolution at trial;(b) trial duration, the fixing of the trial date and the making of any special trial directions that are required. In respect of these matters counsel should have available the number of witnesses to be called and the general scope of the evidence to be covered by them so that an accurate assessment can be made of trial duration. In addition, counsel should be in a position to indicate if any order should be made in relation to experts pursuant to r 9.44;(c) settlement and whether a mediation or a Judicial settlement conference should be ordered.[32] It is my intention, following the making of appropriate discovery orders, to set a date and an agenda for a conference covering the matters referred to.Costs[33] This hearing occupied almost a full day. The appropriate category and band for the hearing is Category 2 Band B. The exercise has resulted in the defendant receiving some clarity and resulting in the requirement for the plaintiff to file an amended statement of defence. There were clearly benefits to both sides in the exercise that was carried out. In my view, the correct approach is that I fix the quantum of costs, which I do, based on Category 2 Band B for a full day hearing and that I reserve liability for payment of costs to follow the result of the proceeding. I make such an order in relation to costs._____________________JA FaireAssociate Judge