BLUESKIN BAY FOREST HEIGHTS LIMITED V PATERSON PITTS PARTNERS LIMITED CA620/2012 [2014] NZCA 268

BLUESKIN BAY FOREST HEIGHTS LIMITED V PATERSON PITTS PARTNERS LIMITED CA620/2012 [2014] NZCA 268 [25 June 2014]IN THE COURT OF APPEAL OF NEW ZEALANDCA620/2012[2014] NZCA 268BETWEEN BLUESKIN BAY FOREST HEIGHTSLIMITEDAppellantAND PATERSON PITTS PARTNERSLIMITEDRespondentCourt: O'Regan P, Ellen France and Wild JJCounsel: A J Forbes QC and A N Riches for AppellantM E Parker and A J Nash for RespondentJudgment:(On the papers)25 June 2014 at 11.30 amJUDGMENT OF THE COURTA The appellant's two applications (for leave to amend its statement of claimon appeal; for leave to adduce further evidence on appeal) are dismissed.B The appeal is dismissed.C The appellant is to pay the respondent's costs as for two standardapplications for leave to appeal under r 15 of the Court of Appeal (Civil) Rules 2005 on a band A basis with usual disbursements.D The appellant is to pay the respondent's costs of the appeal itself, excluding step 13 (appearance at hearing of appeal), as for a standard appeal on a band A basis with usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Wild J)The background to the two applications[1] This appeal came on for hearing on 11 February this year. It quickly became apparent that the appellant was seeking to argue on appeal a case different from that it pleaded and took to trial in the High Court.[2] The appellant accepted it required leave to file an amended pleading and to adduce further evidence to enable the appellant to run on appeal its proposed different case.[3] In a minute issued on 11 February 2014 the Court gave directions about the filing of applications seeking leave to file an amended statement of claim and to adduce further evidence in support of the appeal. The Court directed counsel to revert with an agreed timetable for the filing of the necessary papers.[4] On 8 April, having heard nothing from the appellant in the intervening two months, the respondent by memorandum applied to the Court to dismiss the appeal for want of prosecution.[5] On 23 April the appellant filed an application for leave to amend its statement of claim on appeal and on 1 May an application for leave to adduce further evidence on its appeal. The former was accompanied by a proposed second amended statement of claim; the latter by briefs of proposed further evidence from Donald Ray Anderson and Kevin John Tiffen.[6] On 5 May the respondent filed a notice of opposition to the appellant'sapplication for leave to amend its statement of claim, and on 15 May a noticeopposing the appellant's application for leave to adduce further evidence.[7] On 16 May the Court issued a minute giving further directions. The Court invited submissions by the appellant on two of the points raised by the respondent in its notices of opposition and set a timetable for the filing of those submissions, andany submissions in response. The Court indicated it would deal with the applications on the papers unless either party sought to be heard.[8] Both parties have filed submissions on the two points raised by the Court, the appellant on 30 May and the respondent on 13 June. Neither party sought a hearing.The case at trial[9] The appellant was developing a new rural subdivision at Blueskin Bay near Dunedin. It retained the respondent to obtain the necessary resource consents for the subdivision.[10] The appellant's case against the respondent at trial was simple: therespondent was in breach of a tortious and contractual duty to the appellant to obtain for the appellant a land use consent at the same time it obtained subdivisional consent from the Dunedin City Council in September 2004.[11] The appellant's main fact witness at trial was its director Mr Bryan Rapsey. Mr Rapsey's evidence was that he had only become aware, in 2007, that the respondent had failed to obtain the required land use consent in 2004.[12] Mr Rapsey's evidence was given against the following, uncontroversial, planning position: had application been made in June 2004 for both land use and subdivisional consents, both would have been granted by the Council in September 2004. That is because the Council was working to its Proposed District Plan. Variation 9A to that plan allowed for a minimum lot size of six hectares for theappellant's proposed subdivision. In November 2004 the Environment Courtdelivered a decision quashing Variation 9A with the result that the minimumsubdivisional lot size reverted to 15 hectares. Following the Environment Court'sdecision there was a limited "window of opportunity" for applicants in theappellant's position to obtain a land use consent based on a six hectare minimum subdivisional lot size. That window had closed by 2007.[13] Thus, the appellant's case at trial was that it had become aware of therespondent's failure to obtain a land use consent in 2004; too late to take advantageof the window of opportunity. It claimed against the respondent the substantial losses it alleged it had incurred as a result.[14] The appellant's case at trial failed because French J found the appellant in fact became aware, at least by the end of February 2005, that the respondent had not obtained the required land use consent.1 French J rejected, as neither credible nor reliable, Mr Rapsey's evidence that he had only become aware in July/August 2007 that the appellant did not have and the required land use consent. At the heart ofFrench J's rejection of Mr Rapsey's evidence was this paragraph in a letter, dated 23 September 2009, Mr Rapsey sent to the Dunedin City Council:On Thursday 24 February 2005 a meeting was held at the Dunedin City Council offices attended by Kevin Tiffen of Dunedin City Council, Brian Bell a Director of Blueskin Bay Forest Heights Limited and me. At that meeting assurance was given that the subdivision consent granted, encapsulated the intention and gave permission for the building of a dwelling on each allotment. A clear assurance was given that Land Use Consent would be approved, when formal application was made.(our emphasis)[15] Under sustained cross-examination, Mr Rapsey was unable to escape the unequivocal meaning of this paragraph: that he knew at that meeting with the Council officers on 24 February 2005 that the appellant had not yet applied for the land use consent it required.The two applications[16] The appellant's proposed second amended statement of claim pleads breach by the respondent of a tortious and contractual duty of care to the appellant, ongoing after the resource consents were granted to the appellant by the Council in September 2004. Specifically, paragraphs 11.4, 11.5 and 17(g) and (h) of the proposed amended pleading allege breach by the respondent of a continuing duty of care to the appellant: " to notify the plaintiff of the urgency needed to apply forland use consent after the November 2004 decision ".1 Blueskin Bay Forest Heights Ltd v Paterson Pitts Partners Ltd [2012] NZHC 2252.[17] We view that alleged duty of care as the pleading of a new cause of action. First, the duty is alleged to have been owed at a different and later time than the duty previously pleaded. It alleges a duty extending over a period of time during which no duty had previously been alleged. Secondly, the duty alleged is different in its nature. The allegation of a duty urgently to advise is new. It is apparent from theappellant's further submissions of 30 May that the alleged urgency will be at the heart of the amended case it seeks to advance on appeal.[18] The Court of Appeal (Civil) Rules 2005 permit the Court to allow amendment of pleadings on an appeal: r 48(2). Leave will only be granted if the amended pleading is necessary to do justice to appellant and respondent alike on the appeal.[19] The proposed amendment is not required to do justice to the appellant. With the benefit of competent legal advice, the appellant decided how it would frame its claim against the respondent in the High Court. The failure of that claim wasconsequent upon French J's finding adverse to the appellant – her rejection of Mr Rapsey's evidence on the critical timing issue. That finding is not challenged on appeal.[20] The different claim now sought to be pleaded and argued on appeal could have been put at trial. It was not put because it is essentially inconsistent with the case the appellant advanced at trial. As we have explained, the essence of theappellant's case at trial was "you breached a duty owed to us in 2004 and we onlybecame aware of your breach in 2007 – too late to avoid the resulting losses". Faced with French J's finding that the appellant was aware by February 2005 at the latest, in good time successfully to apply for the required land use consent, the essence ofthe appellant's case has changed. It is now "we accept we knew in February 2005 we did not have the required land use consent, but we did not know there was urgency to apply for it and we are now saying that you had an ongoing duty to advise us of that urgency".[21] Fundamental is the rule that a party must advance its available arguments at trial, and support them by calling all available relevant evidence. As it is sometimesput, a plaintiff must put "its best foot forward" at trial. If alternative arguments areopen the party must choose which it runs, if it cannot sensibly run both.[22] We are not in doubt that allowing the amended pleading would be unjust to the respondent. It would require the respondent now to face, effectively, a fresh trial, this time of a different and essentially alternative argument not advanced at trial. That would be anathema to justice. It would be to permit a "second bite at the cherry". We cannot think of a single reason why the respondent should now be burdened with this.[23] Further, we accept the respondent's argument that permitting the amendedclaim would prejudice it in a number of ways. First, and perhaps foremost, we accept the proposed amended statement of claim advances a new cause of action, now statute-barred. That is an obvious and recognised instance of prejudice to a respondent: Chilcott v Goss; Elders Pastoral Ltd v Pemberton.2[24] As to what constitutes a new cause of action, counsel for both parties citedthis Court's judgment in Chilcott. Delivering this Court's judgment, Richardson Jstated:3In essence, "cause of action" means the act on the part of the defendantwhich gives the plaintiff the cause of complaint (Smith v Wilkins and Davies Construction Co Ltd).4 [25] In Smith, the then Supreme Court referred to the English Court of Appeal'sjudgment in Marshall v London Passenger Transport Board.5 The Court paraphrased the test posited by the English Court of Appeal for determining whether an amended pleading raises a new cause of action as follows:6 is it something essentially different from that which was pleaded earlier? Such a change in character may be brought about by alterations in matters of law or of fact, or both. Alterations of fact could possibly be so vital and important as by themselves to set up a new head of claim. On the other hand, more often alterations of fact do not affect the essence of the case2 Chilcott v Goss [1995] 1 NZLR 263 (CA); Elders Pastoral Ltd v Pemberton (1990) 2 PRNZ 188 (HC) at 190.3 At 273.4 Smith v Wilkins and Davies Construction Co Ltd [1958] NZLR 958 (SC) at 961.5 Marshall v London Passenger Transport Board [1936] 3 All ER 83 (CA).6 Smith at 961.brought against the defendant. In each case it must be a question of degree.[26] The appellant submits its proposed amended claim "merely hones andpresents the existing cause of action in a light better suited to allow the parties toargue the core of the issue". We do not accept that. For the reasons explained in[17] above, we consider a new and different duty of care is now sought to be pleaded. It gives rise to fresh considerations both of fact and law. The appellant essentially acknowledges that, because it seeks to adduce further evidence from Messrs Tiffen and Anderson. The latter of those two proposed witnesses would give expert evidence in relation to the duty of care continuing after September 2004, and in particular the need to advise the need for urgency following the decision of the Environment Court.[27] It is the necessity for further evidence that constitutes the second way in which permitting the amended claim would prejudice the respondent. As just mentioned, the appellant seeks to adduce further evidence from Messrs Tiffen and Anderson. But Mr Forbes QC accepted the different argument now sought to be advanced would require further evidence – or at least further cross-examination – of both Mr Hosken and Mr Cubitt. The former was a director of the respondent firm responsible for applying for the consents; the latter the expert witness called at trial for the respondent. We accept all this further evidence, relating to events now roughly a decade in the past, would involve prejudice to the respondent, not least in terms of the time and cost involved.[28] The third aspect of prejudice relates to the third party proceeding the respondent commenced against the Dunedin City Council, which it settled prior totrial. We accept the respondent's submission that allowing the proposed new claim may undermine "the integrity" (to employ the respondent's terminology) of thatsettlement, to the prejudice of the respondent.[29] Further, in terms of achieving justice between the parties, we accept twofurther points made by the respondent in opposing the appellant's two applications. First, it is difficult to see how the appellant's proposed new case could alter theoutcome of the trial before French J. Given the state of the appellant's knowledgefrom February 2005 at the latest, its own inaction would still be the proximate cause of its loss. The respondent relies particularly on this paragraph in French J'sjudgment:[105] In my view, once Mr Rapsey came to know for himself that he needed to apply for a land use consent but chose for reasons related to assurance(s) given by the Council and logging prices not to apply immediately, the legal position changes dramatically. The operative effect of Paterson Pitt's negligence and breach of contract was spent and the causallink was broken.[30] The appellant attempts to overcome this difficulty by submitting that what Mr Rapsey did not know in February 2005 was the urgency of the need to apply for land use consent. It is far from clear that the need for urgency was not conveyed to Mr Rapsey by Mr Tiffen at their February 2005 meeting. As the respondent points out, in his evidence at trial Mr Tiffen did not accept that Mr Rapsey was entitled to leave that meeting reassured that he did not need to do anything at all.7 Further, we note in his proposed additional evidence Mr Tiffen states:At the time [of the February 2005 meeting] there was a window in which the plaintiff could have applied for Land Use Consent and such applications were being treated very favourably by the Dunedin City Council.[31] Those two statements by Mr Tiffen rather suggest he told Mr Rapsey at theirFebruary 2005 meeting about the "window of opportunity" that then existed. Inshort, they suggest that he told Mr Rapsey there was some urgency. Whether that was so would obviously require further cross-examination of both Mr Rapsey and Mr Tiffen. This demonstrates still further that permitting the amended pleading would necessitate a fresh trial. We need hardly add that an appeal to the Court of Appeal is neither the time nor the place for a fresh trial.[32] The second point is that dismissing the appellant's two applications wouldnot leave the appellant without a remedy, or remedies. As French J commented:8 Mr Rapsey is entirely the author of his own misfortune or, if anyone else is to blame, it is the Council officers for giving assurances they should not have given and/or the Council for failing to honour those assurances.7 Notes of evidence at 127/5–8.8 At [106].[33] For all those reasons, we dismiss both the appellant's applications.[34] The consequence is that the appeal itself must be dismissed, since the appellant accepts it cannot proceed on the pleadings and evidence as they stand.Result[35] The application by the appellant for leave to amend its statement of claim isdismissed, as is the appellant's application for leave to adduce further evidence.[36] The appeal is dismissed.[37] The appellant is to pay the respondent's costs as for two standard applicationsfor leave to appeal under r 15 of the Court of Appeal (Civil) Rules on a band A basis with usual disbursements.[38] The appellant is to pay the respondent's costs of the appeal itself, excluding step 13 (appearance at hearing of appeal), as for a standard appeal on a band A basis with usual disbursements. We appreciate the hearing on 11 February lasted two hours. In not allowing the respondent costs for that hearing, we have factored in our order in [37]: allowing costs for two applications when they were arguably one and the same.Solicitors:Saunders & Co, Christchurch for AppellantParker Cowan, Queenstown for Respondent