QBE INSURANCE (INTERNATIONAL) LTD v STEWARD MOTORSPORTS EUROPEAN LTD [2014] NZHC 1309

QBE INSURANCE (INTERNATIONAL) LTD v STEWARD MOTORSPORTS EUROPEAN LTD [2014] NZHC 1309 [11 June 2014]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2013-404-003382[2014] NZHC 1309UNDER Section 67 of the Judicature Act 1908IN THE MATTER of an application for leave to appeal to theCourt of AppealBETWEEN QBE INSURANCE (INTERNATIONAL)LIMITEDAppellantAND STEWARD MOTORSPORTSEUROPEAN LIMITEDRespondentHearing: On the papersCounsel: SRJ Hamilton for AppellantM Dellow for RespondentJudgment: 11 June 2014JUDGMENT OF ASHER J(Application for leave to appeal)This judgment was delivered by me on Wednesday, 11 June 2014 at 1 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors/Counsel:Kennedys, Auckland.Anderson Creagh Lai, Auckland.R Dellow, Auckland.[1] This is an application for leave to appeal to the Court of Appeal from ajudgment of 18 December 20131 in which I dismissed the appellant's appeal andupheld the District Court Judge's decision to enter judgment for the respondent andgrant it damages in the sum of $41,874.51 together with interest and, in a seconddecision, awarded costs against the appellant.2[2] The appeal involved an insurance claim by a motor engineering company forcosts resulting from damage to the motor vehicle following an accident where thevehicle was being driven by an employee of the respondent. The facts are set outfully in the decision.Relevant principles[3] The threshold test for bringing a second appeal is high. In Waller v Hiderthe Court of Appeal described the test as follows:3The appeal must raise some question of law or fact capable of bona fide andserious argument in a case involving some interest, public or private, ofsufficient importance to outweigh the cost and delay of the further appeal. [4] The Court, after noting that the "scarce time and resources of the High Court and of this Court are not to be wasted", added:4Upon a second appeal this Court is not engaged in the general correction oferror. Its primary function is then to clarify the law and to determinewhether it has been properly construed and applied by the Court below. It isnot every alleged error of law that is of such importance, either generally orto the parties, as to justify further pursuit of litigation which has already beentwice considered and ruled upon by a Court.When the disputed matter is entirely or largely a question of fact the task ofthe applicant is harder. An issue of fact in a matter falling within thejurisdiction of an inferior Court will seldom be of public importance. [5] Questions of cost and delay will be relevant to the exercise of the discretionto grant leave.51 QBE Insurance (International) Ltd v Steward Motorsports European Ltd [2013] NZHC 3457.2 QBE Insurance (International) Ltd v Steward Motorsports European Ltd [2014] NZHC 886.3 Waller v Hider [1998] 1 NZLR 412 (CA) at 413.4 At 413.5 Waller v Hider, above n 3, at 414; Snee v Snee (1999) 13 PRNZ 609 (CA) at [21].Point on appeal[6] The appellant submits that there are two factual and legal errors in the judgment which require clarification:(a) The finding that the brakes had been worked on as alleged by Steward; and(b) The decision to uphold the award of interest in favour of Steward.The first point – no evidence that the brakes had been bled[7] QBE submits that there was an error justifying a further appeal becausecontrary to the finding in the High Court decision the Judge in the District Court hadno sound basis for accepting Mr Barnes' evidence that he had bled the car brakes.His assertion was inconsistent with the finding of old brake fluid in the brake fluidreservoir. It is submitted that Mr Barnes did not actually bleed the brakes at all andhad lied. It is submitted that the District Court Judge was wrong in preferring theevidence of the respondent's expert to that of the appellant's expert. It is submittedthat the only logical and rational explanation was overlooked.[8] What the appellant wants to do is for a third time have judicial consideration(this time by three Judges) of competing detailed factual and expert evidence, andthe extensive submissions that the appellant and respondent have already made inrelation to that evidence, and to assess for a third time whether the respondent'switnesses were telling the truth when they said that the brakes had been bled. This isin relation to what is in essence a background credibility issue, as the primary issuewas whether the employee drove the car on a jaunt of his own.[9] I note that the appellant relies on the decision of Barnes v QBE Insurance(International) Ltd as authority for the proposition that the interpretation ofinsurance contracts is a matter of public importance.6 However, that case involvedthe interpretation of a specific clause that was in wide use at the time. There had6 Barnes v QBE Insurance (International) Ltd HC Auckland CIV-2010-404-5651, 13 October 2011.been no authority on the construction of the clause. No such issue arises in this case, which turned on matters of fact. It was noted in Barnes that questions of delay and expense can often outweigh the importance of correcting any alleged error on appeal.7[10] This is patently the type of assessment of credibility exercise that is notwarranted on the second tier of appeal. It involves a matter of fact, and there is noissue of particular significance or public importance that arises. An allegation of themaking of a fraudulent claim is not intrinsically of particular importance in thecontext of a modest insurance claim. In my view it would come close to abusing theCourt process to have three senior Judges carry out such a time consuming exerciseassessing for the second time the trial Judge's reasons for accepting the credibility ofthe respondent's witnesses.The second point – interest[11] It is submitted that the respondent should not have received interest becauseit did not produce any evidence at trial that costs had been incurred, or that thecustomer who was claiming for the damage against the respondent would have madea claim for interest. The appellant's submissions appear to then suggest that thismeans that the costs award was in error because the Calderbank offer exceeded theamount of damages that should have been awarded.[12] These issues were dealt with fully in the High Court decision. I do notpropose traversing them again. The issue is essentially one of factual assessmentrather than law. It was specific to the particular facts as they arose. Again, therelatively modest amount involved is a relevant consideration. It does not justify thefurther pursuit of this litigation which has already been twice considered and ruledupon. I do not consider that any point of law or fact of sufficient importance tooutweigh the cost and delay of a further appeal arises.7 At [42].General assessment[13] For the reasons given, I conclude that no important question of law or factarises.[14] These proceedings have been underway now for in excess of five years.Despite the relatively modest sum of money involved there has been a six dayhearing in the District Court and a one day hearing in the High Court. The costs ofthe litigation are becoming quite disproportionate to the amount involved.[15] It is no answer for the appellant to say as it does that if it fails the respondentwill be entitled to costs. The draining effect in terms of both time and expense ofsignificant civil litigation is well known and understood, and Court awarded costscan never properly assuage these.[16] On the one hand the appellant is a multi-national insurer. On the other hand the respondent is a small business that has already had to meet some costs because ofthe accident, and is being held responsible for the balance of the costs of the crashedmotor vehicle. The respondent has been out of funds for approximately five and ahalf years.[17] These more general factors also work against a second appeal.Result[18] Application for leave to appeal is declined...Asher J