BEST FOOD FRESH TOFU LTD v CHINA TAIPING INSURANCE (NZ) CO LTD [2014] NZHC 1324

BEST FOOD FRESH TOFU LTD v CHINA TAIPING INSURANCE (NZ) CO LTD [2014] NZHC 1324 [12 June 2014]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2013-404-3094[2014] NZHC 1324BETWEEN BEST FOOD FRESH TOFU LIMITEDPlaintiffAND CHINA TAIPING INSURANCE (NZ) COLIMITEDDefendantHearing: On the papersCounsel: J M Skinner for PlaintiffC R Langstone for DefendantJudgment: 12 June 2014JUDGMENT (NO 2) OF BROWN JThis judgment was delivered by me on 12 June 2014at 4.30 pm, pursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors: Andrew Hooker, AucklandJones Fee, Auckland[1] On 28 February 2014 Associate Judge Bell delivered an oral judgment1 inrelation to the defendant's application for an order for further particulars of the plaintiff's pleading.[2] On 5 June 2014 I heard argument on the defendant's application for review ofthe judgment of Associate Judge Bell. On 6 June 2014 I delivered my judgment on that matter.2[3] By letter dated 10 June 2014 the defendant purported to seek to have my judgment corrected or reconsidered pursuant to r 11.10 (the slip rule).Circumstances leading to the defendant's application[4] In its amended statement of claim dated 28 August 2013 the plaintiff pleaded paragraph 1.5 as follows:1.5 The plaintiff notified the defendant of the damage and the defendant instructed an assessor to manage the claim.The defendant admitted that paragraph in its amended statement of defence dated 23 September 2013.[5] The plaintiff filed a second amended statement of claim dated 6 December 2013 in which it repleaded paragraph 1.5 as follows:The plaintiff notified the defendant of the damage and the defendant:(a) Elected to arrange and pay for the repairs;(b) Instructed an assessor to manage the claim.The defendant did not file a defence to the second amended statement of claim.[6] That was the state of the pleadings when the defendant's application forfurther particulars was heard by Associate Judge Bell on 28 February 2014. The1 Best Food Fresh Tofu Limited v China Taiping Insurance (NZ) Co Limited [2014] NZHC 350.2 Best Food Fresh Tofu Ltd v China Taiping Insurance (NZ) Co Ltd [2014] NZHC 1279.argument proceeded on the basis of the allegations in the second amended statement of claim.[7] In his judgment Associate Judge Bell expressly referred to paragraph 1.5 of the second amended statement of claim in the course of considering the particulars sought of paragraph 2.1 of the pleading. He said:[11] I do not order the particulars sought by the defendant. The plaintiff has adequately pleaded the basis for its case even though the pleading is somewhat bald. That is, the plaintiff has pleaded in paragraph 1.5 that the defendant did elect to arrange and pay for the repairs and did instruct an assessor to manage the claim. On that basis it is arguable for the plaintiff that if the insurer did undertake to manage the repairs through the appointment of an assessor and by engaging contractors, there can be contractual liability on the part of the insurer if the repair work has not been carried out to a reasonable workmanlike standard. I see the question of implying a term to that effect as being little different from implying such a term in a building contract.[8] The defendant's application for review of the judgment of Associate JudgeBell was filed on 7 March 2014.[9] Subsequently on 14 March 2014 the plaintiff filed its third amended statement of claim which contained paragraph 1.5 in essentially similar terms to that in the second amended statement of claim. It stated:1.5 The plaintiff notified the defendant of the damaged property and the defendant:A. Elected to arrange and pay for the repairs to the damaged property; andB. Instructed an assessor to manage the claims under the MDPolicy and BI Policy on its behalf ("the claims").[10] In its statement of defence to the third amended statement of claim dated 2 April 2014 the defendant admitted paragraph 1.5.[11] Written submissions were filed in advance of the hearing for 5 June 2014. Both sets of submissions addressed both the second and third amended statements of claim.[12] In the course of the defendant's submissions dated 22 May 2014, the defendant specifically addressed the content of paragraph 1.5. First at 5.14 it stated, with reference to the case Davidson v Guardian Royal Exchange Assurance:3 The case is also not relevant because the defendant in the present instancedid not "elect to reinstate". Rather, as pleaded by the plaintiff at paragraph1.5 of the Second Amended Statement of Claim (now paragraph 1.5 of theTASOC), it merely "elected to arrange and pay for the repairs " – see option 6.1.1 in paragraph 5.10 above.[13] The defendant made further reference to paragraph 1.5 of the third amended statement of claim at paragraph 5.17 of its submissions where it said:Further, the plaintiff has expressly pleaded at paragraph 1.5 that thedefendant "elected to arrange and pay for the repairs". This is accepted. It has not been pleaded that the defendant failed to pay. In its written submissions dated 29 May 2014 at paragraph 6 (in footnote 2) the plaintiff noted the fact of the admission by the defendant at paragraph 5.17 of its submissions of 22 May 2014.[14] The hearing of the application for review took place on 5 June 2014. At no point in the course of the hearing did the defendant indicate any intention to recant from the position recorded in its written submissions in relation to paragraph 1.5 of the third amended statement of claim.[15] I reserved my decision. At no point did either party seek leave to amend the pleadings or to make further submissions pending my decision.[16] In the course of completing my judgment, on Friday 6 June 2014 it came to my attention that the defendant had filed an amended statement of defence to the third amended statement of claim. A copy of that amended statement of defence was sent directly to my Associate under cover of the following email:We act for the defendant, China Taiping Insurance (NZ) Co Limited, in the above proceedings.3 Davidson v Guardian Royal Exchange Assurance [1979] 1 Lloyd's Rep 406 .We have this afternoon filed an Amended Statement of Defence and served acopy on the plaintiff's solicitors. A copy of this Amended Statement ofDefence is attached.We should be grateful if you would bring this Amended Statement of Defence to the attention of His Honour Justice Brown as soon as possible, as Counsel for the plaintiff and the defendant appeared before His Honour yesterday for the hearing of our client's application for the Review of theOral Judgment of Associate Judge Bell dated 28 February 2014 determiningour client's Application for Further Particulars.The Amended Statement of Defence addresses some of the matters which were raised and in issue at yesterday's hearing, including in particular our client's response to the allegation at paragraph 1.5 of the Third AmendedStatement of Claim dated 6 June 2014 and the introduction of two additional affirmative defences at paragraphs 24 to 28 of the Amended Statement of Defence. We consider therefore that the Amended Statement of Defence, and the amendments to which I refer in particular, may have a bearing on HisHonour's reserved decision and so should be grateful if the AmendedStatement of Defence could be put before him as soon as possible.We have copied this email to solicitors for the plaintiff.We are grateful for your assistance.[17] Where there has not been a close of pleadings date fixed, it is open to a party to file an amended pleading with prospective effect. However it is quite another matter to file an amended pleading for the purpose of influencing the outcome of a hearing which has already taken place (and in respect of which judgment is reserved) and causing the amended pleading to be brought to the Judge's attention with the intention that it should have a bearing on the Judge's reserved decision.[18] It is quite apparent from the email that the defendant intended that its change in position with reference to the admission of paragraph 1.5 of the third amendedstatement of claim was intended to "have a bearing" on my decision. It was for that reason that the request was made by the defendant that it be put before me as soon as possible.[19] That course of conduct was inappropriate and ignored the recognised procedure applying to the provision of submissions subsequent to the conclusion of a hearing and prior to delivery of judgment: refer Practice Note [1968] NZLR 608:Where either counsel after the hearing of a matter is concluded, but before delivery of judgment, desires to make further submissions, application must first be made to the Judge for leave. It is only in exceptional circumstancesthat leave will be granted as, for example, where some pertinent consideration or authority has been overlooked or a new matter has arisen since the hearing which has not been anticipated by counsel. In the event of either counsel desiring to make such an application, an appointment should be sought with the Judge in chambers through the Registrar. No submissions or memoranda filed without leave will be considered.[20] Quite apart from the procedural impropriety, it would not be an appropriate course in any event in relation to an application for review of a prior decision which, like an appeal, is determined on the basis of the state of the pleadings and evidence which prevailed at the date of the decision under review or appeal.[21] Consequently, even if in the present case the procedure provided in the Practice Note had been followed, I consider that it is most unlikely that leave would have been granted to file further submissions based on a significant change in the pleadings from the position which applied before the Associate Judge.[22] However in the circumstances I decided to turn a Nelsonian eye to the inappropriate approach to the Court and I proceeded to release my judgment.[23] To my considerable surprise I was then provided with a copy of a letter fromthe defendant's solicitors to the Court dated 10 June 2014 seeking to have myjudgment corrected or reconsidered pursuant to the "slip rule". The nature of theinformal application was stated in paragraphs 4-7:4. For the reasons set out below, the defendant respectfully seeks to have the Judgment corrected or reconsidered pursuant to the "Slip Rule": Rule 11.10 of the High Court Rules provides:"11.10 Correction of accidental slip or omission(1) A judgment or order may be correct (sic) 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(2) The correction may be made by the court or the Registrar, as the case may be, -(a) on its or his or her own initiative;(b) on an interlocutory application."5. The defendant applies to do so on the basis that it appears that in delivering his reserved Judgment, Brown J had not seen or considered the Amended Defence which was filed on 6 June 2014 before the Judgment was delivered.6. The defendant considers that the Amended Defence may havematerially affected Brown J's decision.7. We should be grateful if this letter could be put before His Honour as soon as possible. Should a memorandum or formal application be required please let us know.[24] The letter elaborated on the paragraph 1.5 issue in the following way:10. For the purposes of this application, the significance of the Amended Defence filed by the Defendant on 6 June 2014 is that it amended thedefendant's pleading to paragraph 1.5 of the Third AmendedStatement of Claim dated 14 March 2014 which alleged:"1.5 The plaintiff notified the defendant of the damaged property and the defendant:A. Elected to arrange and pay of(sic) the repairs to the damaged property; andB. Instructed an assessor to manage the claims underthe MD Policy and BI Policy on its behalf "11. The defendant's Statement of Defence dated 2 April 2014 hadadmitted (in error) paragraph 1.5 of the Third Amended Statement of Claim.17. It is clear therefore that His Honour considered that the defendant'sadmission of paragraph 1.5 of the Third Amended Statement of Claim was a key material factor in dismissing the application for review.18. It is the defendant's position that had His Honour had theopportunity to consider the Amended Statement of Defence prior to delivering the Judgment, his decision may have been materially different. However, the Amended Statement of Defence was not taken into account.19. The defendant therefore requests that the Judgment be reconsidered and corrected (as necessary) under the provisions of High Court Rule 11.10.[25] A copy of the letter was sent to the solicitors for the plaintiff who in response filed a memorandum in which they submitted:(a) The defendant's application for further particulars was determined onthe basis of the pleadings then filed and a subsequent amendment of the pleadings cannot be taken into account on review;(b) There has been no accidental slip or omission that requires correction.[26] The plaintiff requested that the application be rejected and that costs be awarded to the plaintiff.Decision[27] The stance taken by the plaintiff is correct on both issues.[28] As noted above4 an application for review of a judgment of an Associate Judge is determined on the basis of the materials considered by the Associate Judge. It was upon that basis that the application for review in the present case was conducted. It would not have been appropriate for the defendant to pursue an application for review of the judgment of the Associate Judge on the basis of a changed set of circumstances from that which the Associate Judge considered.[29] It was most certainly inappropriate for the defendant to seek to change its position subsequent to the hearing of the application for review and to draw theCourt's attention to its subsequently filed amended pleading for the purpose ofinfluencing the outcome of the review hearing previously held.[30] With reference to the suggestion in paragraph 11 of the letter5 that paragraph1.5 had been admitted by the defendant "in error", I do not accept that suggestion.An essentially similar paragraph had been admitted in the amended statement of4 At [20].5 At [24] above.defence6 and the defendant's written submissions expressly accepted the allegationin paragraph 1.5 of the election by the defendant.7[31] I agree with the plaintiff's submission that my judgment of 6 June 2014 doesnot contain any error arising from an accidental slip or omission which warrants correction under r 11.10. On the contrary, the suggested error or omission, namely my (supposedly) not having seen nor considered the amended statement of defence, was a conscious act on my part to decline to have regard to the amended pleading orthe submission in the defendant's email of 6 June 2014 for the reasons explainedabove.[32] The defendant's request in its solicitor's letter of 10 June 2014 to have myjudgment corrected or reconsidered is declined.[33] I consider that the plaintiff is entitled to costs in relation to the defendant'sapplication of 10 June 2014. The defendant is to pay costs to the plaintiff in the sum of $1,000.________________________________Brown J6 At [4] above.7 At [13] above.