LYTTELTON PORT COMPANY LIMITED v AON NEW ZEALAND & ORS [2018] NZHC 2809 _x000b_

LYTTELTON PORT COMPANY LIMITED v AON NEW ZEALAND & ORS [2018] NZHC 2809[30 October 2018]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2015-409-000428[2018] NZHC 2809BETWEEN LYTTELTON PORT COMPANYLIMITEDPlaintiffAND AON NEW ZEALANDDefendantAND OPUS INTERNATIONALCONSULTANTS LIMITEDFirst Third PartyAND COLLIERS INTERNATIONALVALUATION (CHCH) LIMITEDSecond Third PartyHearing: 7 September 2018Appearances: N R Campbell QC and S D Williams for PlaintiffJ G Miles QC, and N R Frith for DefendantReasons: 30 October 2018REASONS FOR JUDGMENT OF NICHOLAS DAVIDSON J(LEAVE FOR SECOND APPEAL)[REDACTED VERSION]A. INTRODUCTION [1]LPC'S claim against Aon [4]Aon's third party claim against Colliers International Valuation(ChCh) Limited [5]Aon's third party claim against Opus [6]LPC [7]B. JUDGMENT AGAINST WHICH LEAVE IS SOUGHT TO FURTHERAPPEAL [8]Associate Judge Christiansen's decision [10]LPC's pleaded claim against Aon [15]Aon's (draft) pleading against Mr Paterson [21]Privilege [24]Joinder [31]C. APPLICATION FOR LEAVE TO APPEAL [49]Outline of the parties' positions [49]Privilege [58]LPC00040 [58]LPC01596 [65]Privilege – discussion [78]Joinder argument for Aon [82]First alleged misapprehension – that the insurers would or may haveagreed to extend cover [86]Second alleged misapprehension – Mr Paterson had no responsibilityto address asset schedules as Aon was understood to allege [91]Third alleged misapprehension – LPC instructed Aon to effect fullreplacement insurance [92]First 'error' [93]Second 'error' [94]Third 'error' [96]Fourth 'error' – in undertaking a factual enquiry [98]Summation – three alleged misapprehensions – four alleged errors [99]Joinder argument for LPC [100]D. DISCUSSION [118]E. CONCLUSION AND DISPOSITION [132]A. INTRODUCTION[1] Lyttelton Port Company Limited ("LPC") suffered damage to its assets in theCanterbury earthquake sequence beginning 4 September 2010. It negotiated asettlement of some $450,000,000.00 with its insurers, but it says this was less than thecover which it should have had.[2] It says that its broker Aon New Zealand Limited ("Aon"), was negligent infailing to secure an unambiguous policy wording to reflect its instruction that it havefull reinstatement cover for its assets with no sublimits. Aon denies any breach butsays if it is liable, then LPC's own solicitor, Mr Paterson, is a joint tortfeasor with it,and should contribute to any judgment sum.[3] Aon has so far failed to obtain leave to join Mr Paterson as a third party. Leaveis required as it did not join him as of right within the time allowed under the HighCourt Rules ("HCR"). For this judgment, the question is whether leave to appeal tothe Court of Appeal should be granted against the most recent judgment of this Courtdeclining joinder, given on a review of the judgment of AssociateJudge Christiansen to the same effect. There are two facets of this case which areunusual. First, LPC does not sue its own solicitor for negligent breach of contract, butAon seeks to join him as joint tortfeasor despite having no contractual relationshipwith him. The second is that cover was effected by placing slips, then earthquakedamage occurred before the policy wording was concluded.LPC'S claim against Aon[4] LPC says Aon was negligent and in breach of contract in arranging cover, andthat it suffered losses of some $170m when the insurer took advantage of what it saidwas ambiguity in the policy wording, and in the placing slips.Aon's third party claim against Colliers International Valuation (ChCh) Limited[5] The third party, Colliers International Valuation (ChCh) Limited ("Colliers"),was joined by Aon after leave was granted by Associate Judge Matthews.1 Aon says1 Lyttelton Port Company Ltd v Aon New Zealand [2018] NZHC 568.that if it is liable to LPC, which it denies, then Colliers should contribute as a jointtortfeasor. That element of the proceeding does not impinge on this judgment.Aon's third party claim against Opus[6] In the same judgment, Associate Judge Matthews also granted Aon leave tojoin Opus International Consultants Ltd ("Opus") as a third party. Again, this doesnot have any effect on this judgment.LPC[7] LPC opposes leave to appeal.B. JUDGMENT AGAINST WHICH LEAVE IS SOUGHT TO FURTHERAPPEAL[8] By judgment of 26 July 2018, I dismissed the appeal against the decision ofAssociate Judge Christiansen.2[9] With other alleged errors Aon says its case for joinder of Mr Paterson wasmisunderstood by this Court. For LPC, Mr Campbell QC submits the Court did notmisunderstand Aon's case, and there is no error, or such that there was does not matter.I summarise the judgment as follows.Associate Judge Christiansen's decision3[10] The Judge declined Aon's application for joinder, and in so doing upheld LPC'sclaim to legal privilege over two "discovered" documents.[11] LPC's solicitor, for some purposes, was Mr Paterson of Markit Law. Aon saysthat Mr Paterson was engaged by LPC to give legal advice about the policy wording:(i) after placing slips were issued on 1 July 2010;2 Lyttelton Port Company Ltd v Aon New Zealand [2018] NZHC 1867.3 Lyttelton Port Company Ltd v Aon New Zealand [2018] NZHC 2215.(ii) after the first earthquake on 4 September 2010;(iii) before the wording was concluded in the policy issued on28 October 2010.[12] Aon says if it was negligent in not alerting LPC to defects or ambiguities in thepolicy wording, and resolving them, then so too was Mr Paterson; he contributed toany loss which LPC can prove it suffered as the result.[13] The contest as to legal privilege concerns two emails sent after the 4 September2010 earthquake, but before the Material Damage Policy ("MD policy") was issuedon 28 October 2010. One was sent by Mr Faire, a claims consultant working for LPC,to Mr Paterson, and the other by LPC's CFO, Ms Meads, to Board Chair Mr Fisher,which refers to comments said to have been made by Mr Paterson about the draftpolicy wording.[14] The Associate Judge upheld the privilege asserted by LPC, and found that therewas no waiver. His Honour refused leave to join Mr Paterson for several reasons, onebeing that he did not contribute to LPC's loss as he was not engaged until after thepolicy became legally binding when the placing slips were issued, and after the 4September earthquake had damaged LPC's assets. Another reason was that LPCinstructed Aon to make it clear to the insurer that there should be full reinstatementcover with no sublimits, so whatever Mr Paterson advised or did not advise, he did notcause or contribute to loss when the policy wording was said by the insurer to beambiguous.LPC's pleaded claim against Aon[15] LPC pleads that Aon failed to ensure that LPC had full reinstatement cover,subject to a single limit of liability with no asset specific sublimits. It pleads that Aoncould have secured such cover by making sure there was no ambiguity in the policywording. It also pleads that Aon earlier failed to draw up a material damage placingslip which was clear and unambiguous, in the same regard.[16] The insurer contested the scope and terms of cover and LPC says settlementwas achieved for less than the cover it sought and should have had. It faced resistancefrom the insurer in several respects.[17] LPC pleads that Number One Breastwork should have been reinsured on areinstatement basis, but was not, although it had such cover under the expiring policy.It says that it should have been advised to obtain the estimated reinstatement costs forNumber One Breastwork, and a valuation was needed to put into the MD spreadsheets.If Aon identified that the relevant spreadsheet (prepared by Opus) had a zero-dollarvalue and had raised this with LPC then LPC says it would have made sure it hadreinstatement cover.[18] Then LPC says that "excluded as agreed" assets were insurable but Aon failedin several ways:(a) to get estimated reinstatement values for them;(b) to analyse underwriting information for such assets to present toinsurers;(c) to identify the assets "excluded as agreed"; and(d) to raise with LPC whether such "excluded as agreed" assets were to beinsured, and to advise LPC that assets identified but not valued in thespreadsheets might not be covered under the policy.[19] It pleads that Aon failed to advise LPC to obtain valuations for these assets, toensure estimated reinstatement cost values were in the MD spreadsheets, to providereinstatement cost values for these assets, and to arrange for full reinstatement cover.If prior to 4:00pm on 1 July 2010 Aon had identified these issues and raised them withLPC, it would have taken steps to ensure full reinstatement cover. (This was longbefore Mr Paterson is said by Aon to have advised LPC about the policy wording).[20] In a similar way, LPC alleges a failure by Aon to include additional valuationdata for Jetty Three and Tug Wharf, which it says should have been unambiguouslyinsured on a reinstatement basis.Aon's (draft) pleading against Mr Paterson[21] Sometime after damage was suffered on 4 September 2010 (the firstearthquake), Aon says that Mr Paterson was retained to give legal advice about thedraft MD policy wording, and the cover under it. It infers this from correspondence,including that said by LPC to be privileged, but says this is an available inference evenwithout using that correspondence.[22] Aon says Mr Paterson should be joined as before 28 October 2010, when theMD policy was executed and issued, he did not advise LPC that the draft MD policywording did not clearly and unambiguously ('indisputably') establish cover withoutsublimits, nor advise about assets being listed in spreadsheets without estimatedreinstatement costs, where the reinstatement estimated was "nought" or "dash", or"excluded as agreed". Had LPC been so advised, Aon says LPC would have instructedit to obtain full replacement cover for all of its assets, and for the MD spreadsheets toinclude estimated reinstatement costs value. (This draft pleading assumes such covercould have been obtained despite the damage having already occurred. The Court issaid to have misapprehended Aon's case, which is not that policy wording would ormay have extended cover beyond the placing slips, but that it should have reflectedwhat LPC wanted, and to which it says it was entitled.)[23] Aon pleads that Mr Paterson owed LPC a duty in contract and in tort toexercise reasonable care and skill in legal advice as to the draft MD policy wording,and if Aon is liable to LPC then Mr Paterson is liable as a concurrent joint tortfeasor.Contribution is sought under the Law Reform Act 1936.Privilege[24] LPC00040 is an email sent to Mr Paterson by Mr Faire of FawcettFaire Limited, with seven documents attached, [REDACTED] This email, marked"Private, confidential and privileged", was disclosed during discovery, listed as"open" in LPC's first affidavit of documents on 24 March 2016, and provided forinspection on 31 March 2016. Documents were inspected by Aon in April 2016 andits solicitors asked LPC's solicitors if they had intended to discover emails betweenMarkit Law (Mr Paterson) and various parties. With no reply, they followed that upin June 2016, with reference to "discovered documents that were marked'privileged'". Mr Paterson then said this email was discovered in error, privilege wasclaimed, and LPC asked that the documents be destroyed or returned. Aon said itwould challenge the claim to privilege.[25] LPC01596 is an email from Ms Meads to the LPC Board Chair dated26 October 2010. In it Ms Meads refers to a letter from the Chief Executive of Aonto LPC, and said that "combined with" emails from staff within Aon, [REDACTED]and the signed policy documents were expected within two weeks. As judgmentrecords, this correspondence does not establish that the draft policies were interpretedby Mr Paterson in a certain way, nor does it reveal what he was told by or for LPC, orwhat passed between LPC, Aon and the insurer. [REDACTED][26] This email was "open" in LPC's first affidavit of documents and provided forinspection. It had not been identified in April/June 2016 correspondence as it was notto or from Markit Law. Mr Paterson told Aon there was no general waiver ofprivileged material disclosed, and in March 2017, therefore nearly a year later, Aon'ssolicitors drew this email to the attention of LPC as it appeared to contain privilegedmaterial. It took some months before LPC asserted privilege in respect of thisdocument, and Aon said it would challenge that. The Associate Judge held that bothdocuments were privileged, and that privilege was not waived.[27] The two judgments in this Court held that Mr Faire was agent for LPC whenhe sent LPC00040 to Mr Paterson. Mr Taylor QC for Aon relied on Robert v FoxtonEquities Ltd,4 and submitted that the request for legal advice had to be made forMr Faire for privilege to apply. In contrast, Mr Campbell QC said that Mr Faire wasacting for LPC as "its man on the ground", and any advice Mr Paterson gave was forLPC. I concluded that Mr Faire wrote to Mr Paterson only as part of his4 Robert v Foxton Equities Ltd [2014] NZHC 726, [2015] NZAR 1351.(Mr Paterson's) engagement, to give legal advice to LPC, thus privilege applies to thisemail.[28] As soon as Mr Frith, solicitor for Aon, adverted to the 'open' categorisation ofthe email, Mr Paterson said it had been mistakenly disclosed, and asked that itbe returned or destroyed. Aon did not accept that and six months later sought to joinMr Paterson, with reference to LPC00040. I upheld the Associate Judge's reasoningthat this document was inadvertently disclosed and privilege was not waived.[29] LPC01596 includes a hearsay reference to Mr Paterson's advice. Aon acceptsthat any such advice was privileged but says privilege was waived when the documentwas listed for discovery, with LPC's failing to identify and act on the mistake until itwas used by Aon in an unredacted form to support the application for joinder.Mr Paterson says that it was disclosed inadvertently, and not identified becauseanalysis for discovery purposes had been of emails to which Markit Law was a party.Aon's solicitors knew there was no general waiver of privilege, and LPC says it wasobvious that this document was privileged. Significant time passed between attentionbeing drawn to LPC01596 on 2 March 2017 and LPC's response, but I did not findthat of itself sufficient to constitute waiver.[30] Under s 65(4) of the Evidence Act 2006, privilege is not waived if disclosureis involuntary or mistaken, or otherwise without the consent of the person who has theprivilege. Administrative or procedural mishap is different from a reasoned intentionto disclose a document, even if later regretted as wrongly reasoned. I concluded thatprivilege was not waived and s 65(4) would apply to preserve the privilege, shouldthat be necessary.Joinder[31] Privilege aside, I concluded that joinder turned largely on whether there wasany merit in Aon's case that Mr Paterson caused or contributed to LPC's claimed loss.LPC at trial will first have to show how the pleaded deficiencies in the placing slipsand policy wording resulted in a lesser settlement with Vero than it says should havebeen the case.[32] The Court will need to look inside the settlement process to see why LPCsettled for so much less than it claimed under the policy, as Aon says there was noambiguity in the placing slips nor in the policy wording. The Associate Judge saw nomerit in the argument that Mr Paterson contributed to LPC's loss and referred toauthority that it is appropriate to assess the relative strengths and weaknesses of theparties' cases.5 Having upheld the claim to privilege over the two emails the Judgeturned to the prospects of a claim against Mr Paterson based on concurrent jointtortfeasorship.[33] Aon's position is that if it is found liable as broker, so as to cause LPC loss,then Mr Paterson had an obligation to advise LPC that the draft policy wording didnot clearly and unambiguously establish cover without asset specific sublimits, andprovide cover for the assets listed in the spreadsheets without reinstatement costvalues.[34] Mr Taylor QC for Aon submitted that it had not been guilty of unreasonabledelay in seeking joinder, and the Court should recognise it could have joinedMr Paterson as of right if it had applied to do so within the time limit under theHigh Court Rules. He says it can issue separate proceedings against Mr Paterson andapply for consolidation and he submits joinder must follow because otherwise theCourt would be dealing with the same issue in separate proceedings.[35] He submitted that the balance between the parties' interests is struck by leavebeing granted, as all three parties are "inextricably linked" with the events in issue.LPC's claim against Aon is for damages and Aon simply seeks to recover any sum forwhich it is found liable by way of contribution from third parties. He says that Aonaccepts that a placing slip, once signed, is a legally binding contract and provides forcover in its own right, but the policy wording supplements or supersedes the slip andcontains the full terms of the insurance contract. LPC says Aon's failure to advert tothe policy wording and its infelicities contributed to loss when later the insurer usedthe policy wording against LPC, saying that it was ambiguous.5 Westwood Group Holdings Ltd v Rilean Construction (South Island) Ltd [2013] NZHC 1739 at[15].[36] Aon says there is a compelling inference to be drawn from the documents thatMr Paterson gave advice with regard to the wording of the draft policy, and that hisconclusion was the same as that of Aon (which conclusion it still asserts), that thecover placed was as LPC sought and unambiguously so. At trial, there will beevidence about insurance practice when finalising policy wordings after the issue of aplacing slip, so the wording reflects the cover already effected by the slip.[37] I did not find any prejudice to LPC if Mr Paterson is joined, although there isroom for criticism of Aon in its delay in seeking joinder. I did not consider the joinderof Mr Paterson would be oppressive.[38] The judgment turned to whether Aon had demonstrated a prima facie case inits joint tortfeasor claim against Mr Paterson. The signed placing slips effected cover,and were received by Aon on 1 July 2010. That had nothing to do with Mr Paterson.The first Canterbury earthquake event occurred on 4 September 2010 before the policywording was finalised. Mr Campbell QC for LPC says the allegations of defaultagainst Aon nearly all relate to events before cover was placed on 1 July 2010,whereas Aon alleges Mr Paterson was negligent after cover was effected by theplacing slips, after asset damage had been sustained under that cover, but before thepolicy issued.[39] The alleged deficiencies in the cover are discussed in the judgment. The policywording was clearly not just a matter of tidying up wording already agreed, expresslyor impliedly, or else there would have been no issue between LPC and the insurer afterthe 4 September 2010 earthquake. I put to counsel that if the policy wording did notmatch the cover effected by the placing slips, then there would be grounds forrectification. Aon's case against Mr Paterson seemed to rest on the basis that whateverthe placing slip provided, the wording of the policy should have reflected what LPCwanted, and the failure to achieve that meant the insurer was given "wriggle room"(as Mr Miles QC put it for Aon in the hearing of the application for leave to appeal),to achieve a settlement for less than the cover which should have been unambiguouslyprovided by the policy.[40] Aon's case is that if there is ambiguity in the policy wording, then ifMr Paterson had given the advice he should have done, unambiguous cover wouldhave been achieved. If Aon is right then one would expect there to be evidence ofcontractual intent in the placing slips, to support rectification of the policy wording tohave the effect LPC sought. If there had been such evidence, one would have expectedit to have been reflected in the settlement between LPC and the insurers.6[41] It has become a contentious point, but as I understood it, Aon maintained thatthe insurers would (or may) have agreed to provide or extend cover for damaged assetsbeyond the cover reflected in the placing slips after the damage occurred. The premiahad been set against reinstatement values in the spreadsheets, and Mr Campbell saidthe insurer simply would not have provided cover for over $50,000,000.00 worth ofassets not included in the placing slips for which no premium had been paid, afterdamage had occurred. In the same way, the insurer would not on the face of it haveagreed to an increase in the loss limits.7[42] I found that the case for Aon, as I understood it, that extension of cover beyondwhat was reflected in the placing slips would have been obtained, was not credible asfurther explained. At the hearing of this application for leave to further appeal,discussed below, I observed that by the time Mr Paterson was said to have beennegligent, the insurers had no obligation to go beyond the placing slips.8 If the insurerwas bound by the placing slips, then there should have been no issue that the policywording should have reflected their terms.[43] I concluded that a placing slip is generally superseded by the policy whenissued.9 I referred to authority that if the Court decides that the parties did not intendthe placing slip to be superseded, it will construe the slip and the policy together.10The placing slip (unlike a cover note) is binding in the interim, and ceases to haveeffect once the formal contract is concluded. My conclusion that the policy supersedes6 Lyttelton Port Company Ltd v Aon New Zealand, above n 2, at [109]7 At [110] - [111].8 At [112].9 At [114]10 Alison Padfield Insurance Claim (4th ed, Bloomsbury Professional, West Sussex, 2016) at 7-8.or may supersede the placing slip for the future, but not usually as to the past, is underchallenge on this application for leave to further appeal.[44] LPC gave clear instructions to Aon what it wanted. Ms Meads was concernedabout the draft MD policy wording and asked Aon whether the wording should makeit clear LPC had full replacement cover. Ms Mullan of Aon responded. The issueraised by LPC as to whether the spreadsheets created sublimits was directed in the firstplace to Aon.[45] My understanding was that Aon says the insurers would or may, after damageoccurred, have been receptive to the wording LPC says it should have secured hadMr Paterson (or Aon) realised and advised the wording was ambiguous. Mr Taylorsubmitted that the policy wording is the outcome of "good faith" negotiation to giveeffect to the intention of the parties already agreed and reflected wording in the placingslips. I understood Aon to say that had it gone into negotiation with the insurer onbehalf of LPC contending for a mutual intention that the policy provide fullreplacement cover without sublimits, then while the draft policy wording may nothave clearly achieved that, there may have been an amendment to the wording. Thereis no evidence to that effect, but that does not mean it would not be available at trial.However, I concluded that Aon could not show (at trial) that Mr Paterson could haveadvised LPC in such a way as to secure the policy wording which LPC says it wanted.The negotiation of the policy wording was Aon's responsibility, whatever Mr Patersonadvised, and that is a central tenet for LPC, pressed hard on the Court by Mr Campbell.[46] I did not find delay or prejudice sufficient to refuse joinder. I brought toaccount the conclusion that the documents relied on by Aon are not available againstMr Paterson and LPC as privilege has been upheld. The application for joinder islargely based on this privileged material. Mr Paterson's 'advice' and what he was toldor provided for that purpose is simply not known in any detail from this material, andleaves much unknown. I concluded there was nothing to suggest that Mr Patersondid or did not do anything which influenced the insurance outcome. LPC told Aonwhat it expected of the policy. It did not get that. I concluded that Aon's applicationto join Mr Paterson was untenable.11[47] Although it was not discussed in the hearing, I made an observation, in 'rider',as I was troubled by an unusual aspect of the case. The joinder application is basedon alleged joint tortfeasorship. If Aon has failed LPC, then Mr Paterson is said byAon to have contributed to any LPC loss. If evidence shows that Mr Paterson's advicedid contribute to LPC resting on what it understood to be Aon's assurance about cover,Aon and Mr Paterson may in their separate ways have contributed to LPC'sunderstanding that it had the cover it wanted. Mr Campbell QC says that this hasnothing to do with it because Aon failed LPC, and that is all it has to prove. Aon,however, seeks to lay off any liability, saying that Mr Paterson is part of the story as acontributor to LPC's loss.[48] If LPC was entitled to rely in contract on each of Aon and Mr Paterson toachieve an unambiguous policy wording which provided the cover it wanted, then itis a question of fact as to what influenced LPC in its decision to accept the policywording as it understood it. It says it had no opportunity to address the draft policywording. It expected Aon to achieve the cover it wanted, and Aon says LPC expectedMr Paterson to advise to the same effect. Mr Campbell says this case does not involvereliance at all, as Aon had to secure the cover LPC wanted, but the rider was based onthe prospect of LPC having received legal advice about the policy wording, whichwith Aon's advice influenced LPC in not pressing for the policy wording which it saysit should have had. Beyond that, there is an underlying question of considerableimport – whether LPC could have achieved an unambiguous policy wording to providethe cover it wanted.C. APPLICATION FOR LEAVE TO APPEALOutline of the parties' positions[49] Aon requires leave to further appeal under s 26(P)(1AA) of theJudicature Act 1908, which will be granted when an appeal raises some question of11 Lyttelton Port Company Ltd v Aon New Zealand, above n 2, at [132].law or fact capable of bona fide and serious argument, in a case which involves publicor private interest of sufficient importance to outweigh the cost and delay of a furtherappeal.[50] It says that it is seriously arguable that the Court erred, and that this is in partbecause the Court misapprehended Aon's case.[51] Mr Miles QC for Aon says that the Court of Appeal will clarify the law anddetermine whether it has been properly construed and applied by the Court below.12He submits the claim for some "$170 odd million", is enough of itself to justify anappeal, if Aon can show there is a serious bona fide argument.[52] LPC says that when it called on the policy, it had to face the insurer's case thatthere was ambiguity in the policy wording and had to settle for a sum less than thecover it should have had, so it sues for the difference between those sums. Aon's caseremains that it did secure cover for a single sum insured, without sublimits, and this isreflected both in the placing slips and the policy wording. Therefore, why LPC gaveground to the insurer when it asserted ambiguity is a central issue at trial. Aon saysLPC should not have given way.[53] However, if the policy wording is found to be ambiguous and causative of lossto LPC, it says Mr Paterson should have told LPC about that ambiguity so the policywording would (or may) have been amended to provide the cover LPC wanted. Thisraises the question of what the placing slips provided and whether they wereambiguous. Aon says it was given no chance to put the case that there was noambiguity in the LPC/insurer negotiation, and that LPC conceded the ambiguity whenit should not have done so and as a result is the author of its own loss.[54] Aon says that the Court was wrong to hold that Aon's case for joinder isuntenable, on several grounds. It says it is seriously arguable that the Court was wrongin upholding LPC's legal privilege over documents LPC00040 and LPC01596,because it failed to apply the correct tests under ss 54 and 65 of the Evidence Act.12 Snee v Snee (1999) 13 PRNZ 609 (CA) at 612-613; Waller v Hider [1998] 1 NZLR 412 (CA)at 413.However, Mr Taylor QC in written submissions for Aon, and Mr Miles QC in oralargument, say whether privilege is upheld or not does not matter as the 'open'documents suffice to support Aon's case for joinder.[55] Aon says LPC cannot 'hide' Mr Paterson's advice 'behind a cloak of privilege'.At heart, this is a submission that if Mr Paterson's advice influenced LPC in acceptingor at least not engaging with the draft policy wording then that must come out at trial,privilege or no privilege, as LPC would be wrong not to acknowledge that when itblames Aon for the loss it says it suffered.[56] The trial is not scheduled until 20 May 2019, so the cost and delay associatedwith a further appeal are said to be justified. The Court has set a timetable betweenthe parties, save for the intended joinder.[57] LPC opposes leave. It says privilege has now been upheld twice and the lawhas been correctly applied. Mr Campbell says Aon seeks to challenge again factualfindings of the Court, and the exercise of discretion whether to allow joinder. Hesubmits an appeal would not raise a question capable of bona fide and seriousargument, nor would it be in the public interest, nor of sufficient importance tooutweigh the cost of a further appeal. He submits that the application of the law tothe facts of an individual case by the fact-finding Court does not give rise to a questionof law.13 Where what is in dispute is entirely or largely a question of fact the task ofan applicant for leave is harder. The Court of Appeal is not engaged in generalcorrection of error in a second appeal.14 The correctness of the decision from whichleave is sought to appeal is not relevant to determining whether leave should begranted of itself.15 Mr Campbell says in a forthright way that it does not matter whatMr Paterson did or did not do, as the contract between LPC and Aon is the real issue,so that comes down to saying Mr Paterson is out of the loop, and should stay there.PrivilegeLPC0004013 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [25].14 Waller v Hider, above n 12, at [412].15 Gregory v Gollan, HC Auckland CIV-2005-404-2485, 4 July 2007 at [7].[58] Mr Miles QC says that I did not apply the test of privilege enunciated by Kos Jin Foxton Equities.16 He submits that for LPC00040, nothing indicates that Mr Fairehas been told by "the lawyer" to send documents to Mr Paterson, and there is nothingto indicate that his response would be privileged. Mr Faire does not say expressly thatthe email was for the purpose of getting legal advice. If it was for legal advice, thenMr Miles says the advice went back to Ms Meads, not to Mr Faire, and that does notmean of itself that it was privileged. Mr Miles says it is seriously arguable that thisCourt erred with regard to privilege as the wrong test under s 54 of the Act was applied,and the conclusion of the Court was based on unsupportable finding of fact.[59] In Foxton Equities, Kos J said:[40] Given that privilege is now codified in the Evidence Act 2006, it isimportant to focus on the words of the statute. They support the view that tobe an agent for the purposes of privilege, a person must be given authorityto communicate with the solicitor to obtain legal advice, and actually do so.[41] Section 54(1) describes "a person who [requests or] obtainsprofessional legal services". Privilege then attaches to the communicationsbetween that same "person and the legal adviser". I say the "same person"because there is no indication that Parliament intended the word "person" tohave two meanings within the same sentence. A third party to whom privilegeattaches must be operating under an agency agreement that encompasses them[requesting or] obtaining professional legal services.[42] That approach is supported by s 51(4), which emphasises theimportance of authorisation:Any reference in this subpart to a communication made or receivedby a person or an act carried out by a person includes a reference to acommunication made or received or an act carried out by anauthorised representative of that person on that person's behalf.[43] I find that TAL (through its employee Mr Truebridge) was acting asthe defendant's agent in relation to the exercise of obtaining a workablesubdivision consent from the Council. This included work on a potentialapplication to amend the conditions of the consent. It required TAL to obtainlegal advice on that work. I am satisfied that Godfrey Hirst clothed TAL withthe authority to obtain legal services form Chapman Tripp directly on behalfof Godfrey Hirst. And, thereby, the defendant.[60] Whether a third party is authorised by the client to communicate with asolicitor to obtain legal advice is a question of fact. For Aon, it is submitted that thereis no evidence that Mr Faire was operating under an agency agreement to that effect16 Robert v Foxton Equities Limited, above n 4.and there is no evidence that he had authority from LPC to request such legal services.The submission is that Mr Faire "simply passed on insurance documents toMr Paterson to allow him to provide advice directly to LPC", so there is no basisto claim privilege. This seems to me an unsupportable submission for reasons whichfollow but it remains Aon's position.[61] LPC's evidence given through Ms Meads is that Mr Paterson was asked forlegal advice about LPC's insurance claims, and the request made for Mr Faire to sendLPC00040 was for that purpose. Aon says he acted as a mere conduit fornon-privileged documents. This email was sent at a time of considerable sensitivityfor LPC given the damage which had already occurred, and in my view, it was plainlysent to get legal advice. However, if these are non-privileged documents for someother reason, then my conclusion as to the nature of the advice being sought issubmitted to be wrong, so should go on appeal. I do not understand how it can be saidthat there was "no evidence" to suggest that Mr Faire was operating under an agencyagreement to request or obtain professional legal services. The purpose of the emailis in my view quite clear, to get Mr Paterson's advice for LPC [REDACTED].[62] Aon says a further appeal would determine the correct legal test as to whethera communication between a 'third party' and a solicitor attracts privilege.Mr Campbell says that the correct legal test is not in doubt under s 51(4) of the Act.I have not read conflicting judgments as to the correct test. I concluded that this emailwas sent to obtain legal advice from Mr Paterson. I can see no argument about thebasis upon which Mr Faire wrote to Mr Paterson. The Associate Judge andI concluded that Mr Faire was instructed to send the email to Mr Paterson. I agree thatAon simply seeks to challenge the factual finding that this document is privileged.LPC claims privilege over the whole of LPC00040 and I upheld that, as did theAssociate Judge.[63] Aon's alternative argument is that LPC's claim to privilege over LPC00040and its attachments should be restricted to the content of the covering email and notthe attachments or identifying characteristics, and that this was not dealt with in thejudgment. Aon says that if privilege is upheld, it should be modified becausethe attachments are not privileged. These documents will emerge as part of thenarrative in the development of the draft policy wording, and the policy's final form.I agree with Mr Miles that the attachments do not become privileged. Their disclosurewill not indicate the advice Mr Paterson gave. I consider the attachments to LPC00040are not privileged, and this relatively minor matter should be addressed on furtherappeal.[64] I would therefore be minded to not grant leave to further appeal as to privilegebeing retained over LPC00040, but grant leave to address the modified privilege. Ireturn to this in the recommendations.LPC01596[65] Mr Miles says the Court applied the wrong legal tests under ss 65(2) and 65(4)of the Act and erred when concluding that LPC had not acted inconsistently with itsclaim to confidentiality, and had not waived privilege. It was listed in the open sectionof LPC's list, and provided for inspection, and privilege was therefore waived. Thejudgment upholds LPC's claim to privilege over that part which contains reference tolegal advice. Aon says that when its solicitors wrote to Mr Paterson on 2 March 2017about this disclosure, LPC did not address the issue in reply, nor assert privilege untilnearly three months later, so Aon says privilege was waived and LPC has not actedconsistently with confidentiality in respect of this document. Aon's submission is thatunder ss 65(2) and 65(4) of the Act, the waiver enquiry involves analysis of thecircumstances of the disclosure, and while the focus of s 65(4) is on the act ofdisclosure, s 65(2) applies to the circumstances in the period afterwards. Aon refersto authority in this way:[66] As Allan J said in Pernod Ricard:17Ordinarily, a party to litigation who sees a particular document referred to inthe other side's list without privilege being claimed and is subsequentlypermitted to inspect that document, is entitled to assume that any privilegewhich might otherwise have been claimed for it has been waived.[67] In McGuire v Wellington Standards Committee (No 1), Kos J observed that:1817 Pernod Ricard New Zealand Ltd v Lion – Beer, Spirits & Wine (NZ) Ltd [2012] NZHC 2801at [60].18 McGuire v Wellington Standards Committee (No 1) [2014] NZHC 1159.[22] In most cases disclosure of confidential, privileged material meansthat the material disclosed loses its privilege. That is axiomatic. Privilegedepends upon confidentiality. Material disclosed (e.g. in an affidavit orpleading) is no longer confidential. Ergo, nor is it privileged. An exception ofcourse exists where s 65(4) applies, or there is another effective limitation onloss of confidence.[68] In Rollex Group (2010) Ltd v Chaffers Group Ltd, His Honour stated:19The next question is whether the [disclosure] amounts to a "voluntarydisclosure inconsistent with the claim of confidentiality". The obverse ofthat is an "involuntary disclosure" to which s 65(4)'s continued protectionapplies. There is also a protected middle ground – mistaken disclosure. Thispresumably lies in a no-man's land of voluntariness, but protection is stillgiven in such a case in s 65(4).[69] Mr Miles summarises Asher J's discussion of the terms in s 65(4) in BodyCorporate No 191561 v Argent House Ltd as follows:20(a) An "involuntary" act is one other than a conscious act of will, forexample, a document that falls out of a suitcase that is found by theopposing party;(b) A "mistake" must be a mistake as to the act of disclosure itself, ratherthan the implications of it, meaning that mistakes made in determiningwhether privilege applied, careless, ill-judged or otherwise, did notqualify; and(c) The terms "involuntary" and "mistaken" should be viewedsynonymously with disclosures without consent. A deliberate handingover a document with no qualifying mistake at the time is not adisclosure without consent.[70] Waiver is asserted by Aon because disclosure of LPC01596 was voluntary, "atleast in the mechanical sense". It says that where discovery has been carried outmeticulously, as it is said to have been in this case, using e-discovery and properlylisted documents, the claim to confidentiality cannot be maintained.19 Rollex Group (2010) Ltd v Chaffers Group Ltd [2012] NZHC 1332, [2012] NZAR 746 at [58].20 Body Corporate No 191561 v Argent House Ltd (2008) 19 PRNZ 500 (HC) at [38], [42] and [43].[71] Aon says that on receipt of the document it did not seem an obvious mistake,as it was relevant, and fell within the timeframe when the MD policy wording wasbeing settled. It is also said to be relevant that it was presumed that LPC had electednot to try to conceal that Mr Paterson advised on the MD policy. That presumption is,as I understand it, said to be supported by direct evidence rather than as a matter ofinference. Because the documents were listed, and Mr Paterson says were positivelyreviewed twice before disclosure to Aon, this was not "involuntary" under s 65(4) andnot mistaken either because of careless or an ill-judged failure to identify documents.A misjudgment as to privilege is not involuntary nor a mistake. There is no room fora second bite at a reasoned decision taken to disclose, later regretted.[72] Aon will say that the Court was wrong to find that LPC's disclosure ofLPC01596 occurred without its consent, because Ms Meads was authorised to swearits discovery affidavit and that exercise was delegated to Mr Paterson. Thus, Aon saysthere was a deliberate handing over of a document with no qualifying mistake at thetime, and that is not disclosure without consent.21[73] Further, Aon says that LPC failed to claim privilege in LPC01596 after thedisclosure. Mr Miles says that the issue is whether LPC could fix any waiver underthe Court's equitable discretionary jurisdiction, to restrain use or disclosure of thisdocument by Aon. The promptness with which a party moves to correct erroneousdisclosure is relevant under the principle described in Guinness PeatProperties Ltd v Fitzroy Robinson Partnership (a firm):22the court has the power to intervene for the protection of the mistaken partyby the grant of an injunction in exercise of the equitable jurisdiction unlessthe case is one where the injunction can properly be refused on the generalprinciples affecting the grant of a discretionary remedy, for example, on theground of inordinate delay.[74] Hence, it is submitted there was an inexplicable delay in claiming privilege andthat this is consistent with there being a waiver. Mr Miles refers to Harbour InnSeafoods Ltd v Switzerland General Insurance Co Ltd:2321 Body Corporate No. 191561 v Argent House Ltd (2008), above n 20, at [43].22 Guinness Peat Properties Limited v Fitzroy Robinson Partnership (a firm) [1987] 2 All ER 716.23 Harbour Inn Seafoods v Switzerland General Insurance Co Ltd [1990] 2 NZLR 381 (HC) at 383.It is clear that privilege can be waived. For example in Re BriamoreManufacturing Ltd [1986] 3 All ER 132, Hoffman J held that whereproduction and inspection pre-trial of privileged documents mistakenlyincluded in a list had taken place, it was too late to reverse the process and tocorrect the mistake. The Judge observed however that there was a right tocorrect a list before inspection took place, that is before actual disclosure tothe other party.[75] He also refers to passages from Guinness Peat:24(1) Where solicitors for one party to litigation have, on discovery,mistakenly included a document for which they could properly haveclaimed privilege in Pt 1 of Sch 1 to a list of documents withoutclaiming privilege, the court will ordinarily permit them to amend thelist under RSC Ord 20, r 8, at any time before inspection of thedocument has taken place.(2) However, once in such circumstances the other party has inspectedthe document in pursuance of the rights conferred on him by RSC Ord24, r 9, the general rules is that it is too late for the party who seeks toclaim privilege to attempt to correct the mistake by applying forinjunctive relief. Subject to what is said in (3) below, the Briamore isgood law.(3) If, however, in such a last-mentioned case the other party or hissolicitor either (a) has procured inspection of the relevant documentby fraud, or (b) on inspection, realises that he has been permitted tosee the document only by reason of an obvious mistake, the court hasthe power to intervene for the protection of the mistake party by thegrant of an injunction in exercise of the equitable jurisdictionillustrated by the Ashburton Goddard and Hebert Smith cases.Furthermore, in my view it should ordinarily intervene in such cases,unless the case is one where the injunction can properly be refused onthe general principles affecting the grant of a discretion remedy, forexample, on the ground of inordinate delay (see Goddard vNationwide Building Society [1986] 3 All ER 264 at 272, [1986] 3WLR 734 at 745 per Nourse LJ).[76] The point is made that a Court will ordinarily permit an amendment to a listbefore inspection has taken place, but after inspection it is generally too late for theparty who seeks to claim privilege to attempt to correct the mistake by applying forinjunctive relief.[77] Where, on inspection, a party realises it has seen a document only because ofan obvious mistake, the Court may intervene in the exercise of its equitable jurisdictionunless the relief sought should be refused on grounds associated with equitable24 Above 22 at 730-731. The focus is not solely "on the time when disclosure is made, not as hereat the time of a later supplementary affidavit" – at [67].remedies such as inordinate delay. Given the circumstances of disclosure and LPC'slater conduct, Aon says that the Court has made a mistake in principle and it shouldbe corrected. At the very least, the precise words which LPC can claim to be privilegedought to be determined.Privilege – discussion[78] Nothing has been put to me by Aon which tells me that I have applied thewrong legal test as to privilege, whether it applies in the case of LPC00040, or as towaiver. I agree with Mr Campbell that this is a fact specific enquiry, applying theprinciples which I do not consider have been applied in error. I accept, however, thatpartial discovery should apply in the case of LPC00040 and there is a similar issue inrespect of LPC01596.[79] I agree with Mr Campbell when he says that Aon's case is that an appeal wouldaddress the correct legal test for determining whether privilege has been waived, butthat the test is set out in s 65 of the Act. The issue is whether the disclosure, on thefacts, is inconsistent with a claim to confidentiality. He submits that is all that will bedealt with on appeal, whether the disclosure made was inconsistent with a claim toconfidentiality. This document was known by MERW on behalf of Aon to beprivileged. It was obvious in itself, identified by Aon's counsel, and MERW knew itshould not use the document until privilege was clarified, as there was no generalwaiver. On the facts, I concluded that once LPC had LPC01596 drawn to its attention,in the context of privilege, the fact that time passed before LPC asserted privilege doesnot constitute waiver. That is a question of fact.[80] Not only is there obvious and significant private importance to Aon, but theissues of general or public importance include the proper legal test for privilegeattaching to agent's communications, and the proper legal test for waiver ofprivilege in the circumstances described. I have come to agree that waiver is morenuanced than I had initially assessed in the case of LPC01596 although it does seemto be a question of fact.[81] I grant leave to appeal the judgment as to the privilege findings to ensure fullconsideration of the issues. There is otherwise a strong case for privilege beingmodified, if upheld, as Aon submits.Joinder argument for Aon[82] Mr Miles says Aon's case for leave is first based on my misapprehension ofAon's case. He described privilege as a 'side issue', technical and complicated initself, which should go on appeal for those reasons, but Aon's case for joinder does notfall even if privilege is upheld over LPC00040 and LPC01596.[83] Mr Miles says obligingly that the submissions for LPC led the Court tomisconceive Aon's position, by asserting Aon's case relied on "unpleadedpropositions". Further, Mr Miles says that LPC's latest submissions amount to thesame thing and are "simply wrong". He explains that there are two breaches allegedagainst Aon, that it twice failed LPC, first in not drawing up a clear and unambiguousMD placing slip, (which had nothing to do with Mr Paterson) then in not achieving aclear and unambiguous MD policy wording (with which it says Mr Paterson wasinvolved). If Aon failed to draw up MD policy wording which was clear andunambiguous as to total reinstatement with no sublimits, then it says Mr Paterson hasadmitted in open correspondence that he provided legal advice to LPC in relation tothe insurance contract, so is liable for a share of any damages awarded.[84] If there was an ambiguity in the policy wording, which Aon denies, then it saysit could have been addressed and resolved by amended policy wording, which mustmean the insurer would have accepted the placing slips provided for, or the partiesotherwise intended there be, full reinstatement without sublimits.[85] Aon sets out this chronology, as it knows it:Date Event1 July 2010 Placing slips attaching asset scheduled signed byLPC's insurers for LPC's 2010/2011 insuranceprogramme.4 September 2010 First Canterbury earthquake causes loss anddamage to LPC's assets.8 September 2010 Aon provides LPC's placing slips and assetscheduled to LPC's claims consultant,Peter Faire.18 September 2010 Aon provides draft insurance policies includingthe draft MD Policy to Mr Faire.1 October 2010 [REDACTED]4 October 2010 Aon provides draft insurance policies includingthe draft MD Policy to LPC.11 October 2010 LPC emails Aon seeking confirmation that thedraft MD Policy provides for full replacementcover i.e. without asset sublimits.14 October 2010 Aon responds to LPC confirming that the draftMD Policy provides for full replacement coverwithout asset sublimits except where assetsintended by LPC to be covered on a differentbasis. Aon advises that further amendments todraft insurance policies are necessary to matchpolicy response agreed with insurers at time ofplacement.18 October 2010 LPC emails Aon seeking confirmation that Aonwill make it clear that there is no implication inthe MD Policy that the amounts in the assetschedule are sublimits.18 October 2010 Aon emails LPC confirming that draft insurancepolicies have been amended to confirm nature ofcover and that the asset schedule does not formpart of the MD Policy.21 October 2010 LPC emails Aon requesting that Aon provide a"letter of comfort" confirming replacementinsurance programme in place.22 October 2010 Aon writes to LPC confirming that it is notuncommon for the wordings to have final draftsand insurer signings after the commencementdate, particularly as the intended coverage thatwas agreed at renewal has been confirmed by theprovision of the insurer signed placing slips thatinclude the reference to the core policy wordingsthat re in use with Vero as the lead insurer.(AON.28.0077).26 October 2010 Email between Ms Meads of LPC and LPC's thenchairman, Rodger Fisher, [REDACTED]28 October 2010 Insurers sign and return final insurance policies.29 October 2010 Aon sends LPC final insurance policies.First alleged misapprehension – that the insurers would or may have agreed to extendcover[86] The judgment includes reference to the insurers agreeing to extend coverbeyond that agreed in the relevant placing slips.2525 Lyttelton Port Company Ltd v Aon New Zealand, above n 2 at [110] and [111].[87] Mr Miles says that Aon does not allege that the insurer would have "extended"cover beyond the placing slips. Aon says the placing slips established full replacementcover for LPC's assets, subject to a single sum insured per event, and the notation"sums insured" is a reference to the overall value of LPC's assets at risk, not to assetsublimits. The MD placing slip referred to standard policy wording MD6/96 and doesnot have a clause limiting insurance cover to a declared asset value. If the placingslip was ambiguous about asset sublimits as alleged by LPC, Aon says that wasresolved in the MD policy which established full replacement insurance cover for allLPC's assets in New Zealand, subject only to a single sum insured per event, withoutsublimits.[88] Aon says that the MD policy extended to LPC's assets with zero or undeclaredreplacement cost estimates in the asset schedule, unless LPC decided not to obtaincover for those assets, and it further says the MD policy established full replacementcover that would not be prejudiced by innocent misdescription or non-disclosure ofany material particular if disclosure was made when the omission was identified, andthe right premium paid.[89] Aon says at trial its position will be that if the MD policy was ambiguous,whether of itself or measured against the placing slips, then Mr Paterson is a jointtortfeasor with Aon because he was asked to give legal advice in relation to the policywording before the MD policy terms were finalised. If he failed to advise LPC thatthe draft MD policy did not clearly provide full replacement cover for assets withoutsublimits, notwithstanding that Aon thought and told LPC that it did, then Mr Patersondeprived LPC of the opportunity to 'require' further amendments to the draft policy toresolve any remaining ambiguity. That assumes that LPC could have 'required' furtheramendments, which must mean that the insurer was already bound to the cover whichLPC sought.[90] Aon will ask the Court to draw an inference about Mr Paterson's advice fromopen correspondence which proves that LPC00040 was sent to get his legal advice.He was then blind copied into an email from LPC to Aon asking about the draftMD policy wording. Aon says LPC obviously would not have accepted the policywording if Mr Paterson said that the draft MD policy did not unambiguously providefor full replacement cover with no sublimits.Second alleged misapprehension – Mr Paterson had no responsibility to address assetschedules as Aon was understood to allege[91] The second alleged misapprehension is in finding that Aon alleged Mr Patersonwas responsible for addressing asset schedules. Aon does not say he was. It saysMr Paterson was instructed to advise LPC on the draft MD policy wording. If it wasambiguous as to asset sublimits, that should have been addressed to remove anypossible implication that the spreadsheets fixed limits of cover, and put beyond doubtthat assets marked as "zero", "-", or with no replacement cost estimated, were insuredon a reinstatement basis.Third alleged misapprehension – LPC instructed Aon to effect full replacementinsurance[92] The third alleged error in the judgment is in placing weight on LPC havinginstructed Aon to effect full replacement insurance, which is common ground. Aonsays its alternative third party claim is that Mr Paterson failed to identify that theMD policy as amended by Aon did not clearly provide for such so LPC was deprivedof a chance to 'require' further amendments to resolve any ambiguity before it wasfinalised.First 'error'[93] Aon says the judgment is wrong in concluding that the policy wording doesnot usually supersede the placing slip from inception.26 Aon says an interim insurancecontract is preliminary in nature, and anticipates acceptance of the insured's proposal,and the issue of a formal policy. This case does not involve an interim contract orcover note, rather a binding contract of insurance on the basis of the placing slips, acontract which simply contemplates policy wording will follow in terms whichconform to the placing slip. The cover under the placing slip reflects the parties'intention. If a placing slip incorporates reference to policy wording, that wording will26 At [114] and [115].apply at inception of the policy, and in the final policy wording. The placing slip hereincorporates reference to policy wording, which was finalised on 28 October 2010.LPC does not say the MD policy was not effective from inception by the placing slips,or that different terms apply to different insurance events. When LPC made its claimagainst the insurers those claims were governed by the MD policy wording finalisedon 28 October 2010. Aon says that the placing slip provided exactly the cover whichLPC sought, and the policy wording was intended to unambiguously record that cover.If Aon somehow failed to achieve an unambiguous wording, and that caused LPC loss,then Mr Paterson contributed to that loss as he should have adverted to any ambiguity.Second 'error'[94] The second error is said to be in the conclusion that any loss caused to LPChad nothing to do with Mr Paterson. That rests on the proposition that the 'proper'interpretation of the MD placing slip and policy could have been raised in the claimby LPC against the insurer. Aon infers that LPC thought these arguments lackedsubstance because they were not so raised.[95] The Court does not know all that was in dispute between LPC and the insurers,and what factors contributed to settlement. Aon says the Court should not have drawna conclusion about this without evidence. Aon says that discovery so far shows thatthe insurer's legal advice following mediation and settlement was that there was a realrisk the MD placing slips and policy did not provide for asset sublimits. Aon had littleinvolvement in negotiations and was not involved in the mediation, so did not get theopportunity to help LPC in that forum. It thinks the insurers in fact settled on the basisthere were no sublimits.Third 'error'[96] A third error alleged is that LPC's claim against Aon is in part based on whatit did or failed to do before the placing slips issued which effected cover on1 July 2010. Aon says the MD policy superseded the placing slip from inception andLPC's claims against the insurers are governed by the policy. How the policy was tobe interpreted, and whether the relevant placing slip is admissible evidence in thatregard, are said to be matters for trial.[97] LPC does not limit its case to what Aon did or failed to do leading up to theissue of the placing slips on 1 July 2010. Aon says Mr Paterson had the sameinstructions and obligation as did Aon, to achieve a policy wording which providedfor full reinstatement without sublimits. Whether such wording could have beenachieved is an altogether different matter.Fourth 'error' – in undertaking a factual enquiry[98] The fourth error is said to be undertaking a factual enquiry into the sufficiencyof evidence on the application for joinder. As the facts are disputed, all that is neededfor joinder is a prima facie case to bring the third party claim within 4.4(1) of the HighCourt Rules. The factual dispute involves the interpretation of the placing slip andpolicy, the extent to which LPC relied on Mr Paterson's advice, and the extent to whichthe insurers would have accepted further amendment to the draft policy to remove anyambiguity, particularly given the evidential context in which the insurers did acceptsome changes to the draft policy wording.Summation – three alleged misapprehensions – four alleged errors[99] Aon says that if the Court had not proceeded erroneously, there is a prima faciecase against Mr Paterson, warranting joinder. My conclusion that there is no merit inthe joinder application is described as "quite a significant call" because an applicationfor joinder should not descend into the merits, other than to recognise whether thereis a bona fide argument.Joinder argument for LPC[100] Mr Campbell says that this application for leave to further appeal is the fourthhearing associated with joinder, but Aon's case for leave is very different to thatmounted on the previous occasions.[101] Mr Campbell said at the hearing on 12 and 13 March 2018 that it was part ofAon's case that the insurers could have been persuaded to extend cover beyond that inthe placing slips, and that Mr Taylor QC then said this has been done in other casesand is a matter for evidence. Mr Campbell submits that this is not an application fora further appeal on the pleaded case for Aon, but a "further appeal on a new anddifferent case".[102] Aon in its draft statement of claim against Mr Paterson alleges that at no timeprior to the policy being signed by the insurers did Mr Paterson advise LPC that thedraft policy wording did not clearly and indisputably establish cover without sublimits.There is no pleaded allegation that Mr Paterson failed to advise that the draft policywording, let alone the final policy wording, created an ambiguity because "it didn'tproperly reflect the placing slip". Mr Campbell therefore says that Aon has still notexplained how any alleged failure by Mr Paterson caused or contributed to LPC's loss,given that Aon says there was already a contractually binding placing slip in place,effecting cover as LPC wanted.[103] Mr Campbell understood the would-be joinder of Mr Paterson is based on hisfailure to address the policy wording in order to remove any ambiguity about the extentof cover, set against the placing slip. However, LPC pleads against Aon that theplacing slips are ambiguous and the policy wording is ambiguous, so LPC is sayingthat neither the placing slips nor the policy clearly and unambiguously provided for aglobal sum insured with no sublimits. Aon's case is that Mr Paterson should havespotted the ambiguity and Mr Campbell says it would be hard to point out an ambiguityin the policy wording when set against the placing slip, if the placing slip wasambiguous too, as LPC pleads.[104] Mr Campbell says that Aon did plead that Mr Paterson's alleged failure wascausative of loss because Aon lost the opportunity to somehow extend the coverthrough the policy wording, even if that extension was simply to clarify somethingwhich was not clear in the placing slip. The way it is now put is that Mr Paterson'salleged failure caused loss because he "helped create an ambiguity in the cover" bynot identifying that. LPC says that the placing slip is ambiguous and so too the policywording.[105] Mr Campbell also says that Aon is wrong to suggest that judgment was givenunder a misapprehension about what LPC asked of Mr Paterson. LPC's position is thatnothing that Mr Paterson said or advised was of any import, given that LPCspecifically asked Aon to make sure it had the cover it required. As he put it(notionally), LPC told Aon, "When you are making any wording changes to the suminsured, so the very point that's in issue, LPC wants Aon to be making it clear that theamounts set out in the spreadsheet are not the sublimits". He says "no amount ofadvice" by Mr Paterson about the policy wording could have made any difference ifthe placing slips already secured LPC's position. It did not matter what Aon orMr Paterson did thereafter. If the placing slips did not make it clear, then it might havemattered, but LPC asked Aon to make the position clear that when making changes tothe wording relating to the sum insured there were no sublimits. He submits that wasfor Aon, not for Mr Paterson.[106] Mr Campbell corrected me when I put to him that the case for joinder ispredicated on the basis that Mr Paterson gave advice about the issue of such concernto LPC. Rather, he said, it was predicated on a "an alleged failure to give advice".Paragraph 30 of the draft statement of claim pleads that had LPC been provided withadvice that the draft policy wording did not clearly rule out sublimits, then it wouldhave instructed Aon to obtain cover without asset specific sublimits. Paragraph 31pleads that assets listed in the MD spreadsheets without reinstatement cost values, or"zeros" or "excluded as agreed", might not be covered and says that that is simply asubset of the sublimits claim because if there are no sublimits, these items fall away.[107] LPC will say that having asked Aon to secure reinstatement cover withoutsublimits, it did not receive any further draft policy wording from Aon, just the finalsigned policy wording. Aon did make a change to the "sum insured" section of thedraft policy but LPC was stuck with the final policy wording and did not get the chanceto see changes in the wording before it issued. The final wording was signed by theinsurers.[108] Asked about Aon's hypothesis that Mr Paterson was asked about, and did giveadvice about the very matter which ultimately became of such concern to LPC,Mr Campbell says that it does not matter what Mr Paterson said or did not say, becauseit is what Aon was asked to do in contract that is the issue for the Court, and that is anend to it. He says it does not matter what advice Mr Paterson gave or failed to give,as it had no causative effect, and Aon's claim is based on Mr Paterson's alleged failureto advise on the draft policy wording, not the final policy wording.[109] Mr Campbell says that leave to appeal does not involve application of the lawto the facts to an individual case.27 Where the issue is essentially one of fact the taskof the applicant for leave is harder. A second appeal does not involve generalcorrection of error.28 The resources of the Court of Appeal are not to be wasted withoutrealistic hope of benefit, so second appeals are restricted in nature. This is an appealagainst the exercise of discretion and the Court of Appeal will only interfere wherethere is an error of principle, a failure to take account of a relevant factor, a takingaccount of irrelevant factors, or if the judgment was plainly wrong.29[110] The judgment was predicated on Aon not being able to utilise LPC00040 andLPC01596 given the conclusions as to privilege, and this Court held that there was noevidential foundation for a conclusion that Mr Paterson had the legal responsibilityalleged, hence Aon's claim was held to be untenable. Mr Campbell says there was noerror of law and the Court may, and did here, have regard to the parties' cases.30 Thatis not an enquiry into facts but rather a reference to the pleading. By the timeMr Paterson was engaged, the insurance contract had been entered, but the policywording was not finalised. The first asset damage had occurred. WhateverMr Paterson's advice may have been LPC says that it instructed Aon to ensure it hadfull replacement cover without sublimits.[111] While Aon says that the Court erred in its observation that the policy wordingdoes not usually supersede the placing slip from inception, Mr Campbell says that doesnot matter as there is no evidential basis to contend the insurers would have agreed "toincrease their exposure after the September earthquake". Mr Campbell says the Courtdid not misapprehend Aon's case against Mr Paterson. Now Aon says its case againstMr Paterson does not require the insurers to have agreed to extend cover, and whileAon denies it, Mr Campbell says that Aon is advancing an unpleaded premise that theinsurers might have extended cover beyond that established by the placing slips. Mr27 Bryson v Three Foot Six, above n 13.28 Waller v Hider, above n 14.29 May v May (1982) 12 NZLR 165 (CA).30 Westwood Group Holdings Ltd v Rilean Construction (South Island) Ltd¸ above n 5.Campbell says that is still part of Aon's case on the proposed appeal. The Courtconcluded there was no evidential basis for this part of Aon's case, and it lackedcredibility, but Aon now advances a new point, that the policy wording did not includea term limiting cover to declared values and Mr Campbell says there is no evidence tosupport that assertion.[112] Mr Campbell says the Court did not misapprehend that Aon allegesMr Paterson should have reviewed LPC's asset schedules. It pleads that he failed toadvise LPC that the draft policy did not establish cover for assets listed in theMD spreadsheets without estimated reinstatement costs values, etc.[113] Finally, Mr Campbell says that Aon criticises the Court for finding that becauseLPC instructed Aon to ensure cover without sublimits was effected, then whateveradvice Mr Paterson gave could not have caused or contributed to LPC's loss. He saysAon reframes its case, for the first time, to say that Mr Paterson failed to identify thatthe MD policy wording as amended by Aon did not clearly provide for fullreplacement cover without asset sublimits and deprived LPC of the chance to requiresuch further amendments to the MD policy necessary to resolve any ambiguity.Mr Campbell says that is not capable of bona fide and serious argument. It is notAon's case against Mr Paterson, and Aon asserts that LPC and by implicationMr Paterson were given an opportunity to review the amended wording before Aonfinalised it and sent it to the insurers for signing. However, LPC was not given thatopportunity and Ms Meads makes that clear. Aon never gave LPC the amended draftpolicy wordings to review.[114] Aon says that it is improper for LPC to conceal Mr Paterson's involvementfrom the Court, as the advice which it says he gave related to the very matter on whichLPC says it was failed by Aon. Mr Campbell says Aon has never raised this point tochallenge privilege and it is thus beyond the scope of the appeal, but says there is nomerit in the point.[115] LPC says Aon breached its duties to LPC in drawing up an MD policy whichwas ambiguous, so in the end it obtained less from its insurers by settlement than itwould have done. This is not an allegation which relates to Aon's advice to LPC, orreliance on it, so the point misapprehends LPC's claim against Aon.[116] Mr Campbell says Aon wants to revisit the Court's conclusions on the meritsof the proposed third party claim against Mr Paterson, to challenge the Court'sconclusions as to causation, saying that the Court erred by venturing into disputedfacts, along with the alleged misapprehensions of the case against Mr Paterson.However, the Court may have regard to the strength of the parties' cases.31 Thatinvokes review of the pleaded case on facts which are beyond dispute. Mr Campbellsays that LPC's insurance was binding when Mr Paterson was engaged, when therewas no policy wording, but damage had occurred. LPC instructed Aon to make surethe final policy wording provided full replacement cover without sublimits, whateverMr Paterson's advice may have been. So Mr Campbell says Aon's submission that theCourt misapprehended Aon's case against Mr Paterson should be rejected.[117] A new issue has arisen. Aon submits MERW was not on notice of an obviousmistake made about privilege by LPC because it is presumed that LPC elected not toconceal the fact that Mr Paterson advised on the policy. Mr Campbell is right that thereis no evidence for Aon to support that proposition, to show Aon's thinking, internallyor through its own advisers. The asserted 'concealment' that Mr Paterson had givenlegal advice gets close to the issue which lead to the "Rider" in the judgment againstwhich leave to appeal is sought, namely the reason why LPC "lived with" the policywording. The rider was an observation, that if LPC ended up with a policy wordingwhich was ambiguous; which advantaged insurers, whether construed of itself oragainst the placing slips, then the reasons for doing so might include the reassurancefrom more than one source, in this case Aon and Mr Paterson under separatecontractual obligations to LPC. LPC says that that does not matter one jot, becauseits contractual relationship with Aon required it, in its specialist role, to ensure thepolicy wording met LPC's requirements and whatever Mr Paterson did or did not door advise is irrelevant. Here is the rub, because if that submission is correct, thenMr Paterson could never be a joint tortfeasor because the contract between LPC andAon circumscribes the liability of Aon, whether or not Mr Paterson was in truth a31 Westwood Group Holdings Ltd v Rilean Construction (South Island) Ltd, above n 5.'contributor' to LPC's claimed loss. LPC did not choose to sue Mr Paterson and Aonsays it is wrongly exposed without reference to another party if liability is established.D. DISCUSSION[118] Exchanges with counsel were instructive. Mr Miles agreed with the Court thatit does not really matter what the policy says at the end of the day because cover isestablished by the placing slips, by which the cover is "fixed". Aon had no intentionto "alter it" in correspondence between LPC and Aon after the 4 September earthquakeevent, just to get what it already had. This means that if Aon did not achieveunambiguous policy wording, the policy was ripe for rectification.[119] If LPC did not have that cover under the placing slips then that is a differentmatter. (In an exchange with Mr Miles, I inadvertently lapsed into reference to the"cover note" rather than "placing slip" and he was unwittingly drawn into mymistake.)[120] There followed this exchange with Mr Miles:Q. I understand now that your argument is because of the way thepolicy then issued, notwithstanding that core position that the , theplacement slip addressed the position in its entirety, the insurer hadthe opportunity to say that which was finally signed was different.A. Yes.[121] Mr Miles says that Ms Meads in her affidavit demonstrates that Mr Patersonhad been hired as a specialist insurance lawyer and at the material time, "throughOctober", he was acting for LPC. Ms Meads wanted to be sure LPC had fullreinstatement cover and Mr Paterson was clearly copied into her enquiry in that regard.Aon says it has a prima facie arguable case that he was involved in advising about thedraft policy wording which helps determine the cover.[122] Aon told LPC that the asset schedule was not part of the insurance contract,and it says that there is enough evidence to justify a third party notice becauseMr Paterson was "in parallel to Aon" advising LPC on the very issues which makeLPC's case against Aon. In essence, Aon says that after 1 October, Mr Paterson wasasked to advise whether the draft policy wording accurately reflected the "dealrecorded in the placing slip". Mr Miles put it this way, that Mr Paterson was in aposition "to point out that the wording of the policy document didn't nail the deal asclearly as it should have". When he was asked to advise and to use his experienceas an insurance lawyer to say, "Just add this phrase, just add this clause to make itquite clear that this is total reinstatement, no sublimits or " he failed to do so.[123] Mr Miles accepts that there will be no alteration or addition to a material clausein the policy document after cover is fixed by the placing slips, but any ambiguityabout cover should have been removed if it could have been. This point wasmisunderstood by me as I thought Aon said the policy may have been negotiated toextend cover where it was otherwise ambiguous.[124] A question was put to Mr Miles, that if LPC settled on the basis of an ambiguitythat did not exist, that seems to create a problem for LPC. Aon's position is that theinsurer has taken advantage of an ambiguity which does not exist, hence my severalquestions about why the policy was not rectified to reflect the placing slips orotherwise the insurer's position was rejected out of hand. Aon says it was for LPCnot to concede to the insurers.[125] The joinder of Mr Paterson is a matter of considerable import to Aon and inthat sense sufficient under s 26(P)(1AA), as it faces a very large claim. It deniesliability to LPC and it seeks to share with Mr Paterson and other third parties anyliability determined by the Court, and by this application for leave to further appeal.[126] In the end, notwithstanding the particularised errors alleged in the judgment,and the public or private interest, for which it contends, the application for joinderlargely turns on whether there is a bona fide and serious argument contended for byAon or whether it is clearly not available, as I concluded. It is indeed a 'call' of somesignificance as Mr Miles puts it, and it was not made lightly.[127] Mr Miles refers to the LPC pleading against Aon, that it failed to draw up anMD placing slip which was clear and unambiguous that LPC had full reinstatementcover subject only to a single limit of liability, with no asset specific sublimits, so thatLPC's rights, remedies and entitlements under the MD policy were not open to doubt.Further, that it then failed to draw up an MD policy wording clear and unambiguous,to the same effect. The question for this application for leave to further appealjudgment is set against their case. Mr Paterson had nothing to do with the placingslips. So all depends on whether anything he did or did not do contributed to LPC'salleged loss through the "wriggle room" of ambiguity which Aon says stems from thepolicy wording on LPC's case, even though Aon denies final ambiguity.[128] Nothing in the argument for Aon persuades me that my conclusions as to theprivileged nature of the communications of the two emails, LPC00040 and LPC01596,is wrong, but given my conclusion that leave to further appeal should be granted, so itseems futile to put privilege aside if leave to further appeal is granted. My conclusionis otherwise that there is little or no room to weaken the scope of privilege, apart fromthe modification sought by Aon under that head.[129] I do not see any point in exploring whether I misapprehended the case for Aonabout joinder when it was argued before me. I took its submission to be that in thesepointed circumstances where placing slips were issued before the events commencing4 September 2010, before the policy wording was concluded, there might be expertevidence that the insurer would accept a policy wording which secured fullreinstatement cover without sublimits, even if the placing slips did not, or arguablydid not, extend that far. I have read the transcript of the submissions and it seems tofit with my understanding. However, that is not Aon's case now, so this judgment isgiven in the context of the case it now puts, which I summarise as follows:(i) While LPC says there is ambiguity in the placing slips, Aon says thereis none, so full reinstatement cover with no sublimits was in place as aresult of the placing slips being issued.(ii) LPC says there is ambiguity in the policy wording. Aon says there isno ambiguity in the policy wording.(iii) Aon does not know why in these circumstances LPC conceded to theinsurer as it seems to have done during negotiations which led tosettlement, but it says any loss to LPC was not caused by anything itdid or did not do. The circumstances in which settlement was reached,the factors in play, will come up at trial.(iv) Aon then says that despite its position in (iii) above, it faces theallegation that it is responsible for "wriggle room", available to theinsurer to argue that the cover did not provide for full reinstatementwithout sublimits because the policy wording was ambiguous. If LPCcan establish loss because the policy wording gave the insurer anadvantage it should not have had (which must mean there was full coverunder the placing slips), then it can only be because the policy left'wriggle room' which compelled LPC to settle for less than fullreinstatement value without sublimits.(v) At that point Aon says that in contract or in tort, there was more actingon LPC's corporate mind about cover than just Aon's role as broker.Mr Campbell says Aon had a contractual obligation to meet thecommercial expectations of LPC, and it did not do so, so that is an endto it. Aon says that is not an end to it, because it says Mr Paterson gaveLPC advice which went directly to the issue which it alleges Aon gotwrong. It says that Mr Paterson was instructed to give advice aboutthis issue, although exactly what he was asked to do, and the exactadvice he gave is unclear. Aon says it is entitled to join him as a jointtortfeasor, because he cannot simply be put to one side by LPC as notcontributory to its loss. There is a lot in this evidentially, which willbecome apparent only at trial unless LPC can close down all evidentialinquiry as irrelevant.(vi) Aon says that LPC cannot get around Mr Paterson's involvement andhis obligation to LPC simply by confining its claim to Aon. Aon saysthis represents a concealment of the true position as to Mr Paterson'sinvolvement.[130] The hurdle for Aon on the merits is whether, based on the above statement ofits position, it can establish a good and arguable case for joinder, and whether anyjudgment conclusively against that is amenable to further appeal. I do not considerthe privilege issues should go further on appeal except to the limited degree ofmodification identified, but if leave to further appeal is to be granted, I have decidedleave should capture the whole of the privilege argument.[131] I have taken the merits of joinder on Aon's case that Mr Paterson had nothingto do with the placing slips, but if the policy wording had been addressed by him toidentify that the wording did not unambiguously provide for the cover LPC required,then this may have meant LPC could have had the wording amended to that effect.While the pleading strongly suggests that LPC says it could have achieved that, it isfar from apparent on the evidence so far before the Court. If LPC was entitled to anamended policy wording anyway, because there was no ambiguity in the placing slips,or the policy wording was unambiguous, then the case against Mr Paterson wouldnever get started, as nothing he or Aon did would have caused loss. If LPC was notentitled to an amended wording because the placing slips were ambiguous,Mr Paterson did not cause that, nor could he have corrected that. He might havepointed out an ambiguity but that does not mean LPC would have achieved the policywording it wanted. It all depends on whether anything he did or did not do causedloss, and only if the position could have been "saved" by him, could he be liable inprinciple. This LPC says is simply not possible.E. CONCLUSION AND DISPOSITION[132] By the track of argument set out above, I have come to the view, with somehesitation, that there is enough alive in my judgment for further argument, first in thequestion whether Mr Paterson's contractual obligations to LPC are irrelevant, whichis LPC's contention. Secondly, Aon may be able after a further appeal to establish abasis for saying that if there was an ambiguity in the policy wording, of itself or setagainst the placing slips then that led to LPC not addressing the policy wording to getwhat it wanted. Whether it was entitled to is an entirely different matter. If it was not,then any 'loss' had nothing to do with Mr Paterson.[133] I conclude that the issues identified in the tracked argument for Aon anddiscussion are such as to warrant a further appeal to the Court of Appeal, and for thosereasons I grant leave for Aon to bring such an appeal, by the short judgment I issuedfor the convenience of the parties on 9 October 2018..Nicholas Davidson JSolicitors:Chapman Tripp, Christchurch (for Aon New Zealand Limited)MinterEllisonRuddWatts, Auckland (for Lyttelton Port Company Limited)Copy to counsel:N R Campbell QC, Barrister, Auckland (Counsel for Lyttelton Port Company Limited)S D Williams, Barrister, Auckland (Counsel for Lyttelton Port Company Limited)J G Miles QC, Barrister, Auckland (Counsel for Aon New Zealand)L G Taylor QC, Barrister, Auckland (Counsel for Aon New Zealand)