IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE	
CIV-2018-488-2
[2019] NZHC 21	

BETWEEN	RINTOUL GROUP LIMITED
Plaintiff	
AND	JACQUELINE ROBSON
Defendant	

Hearing:	28 November 2018	
Appearances:	Nathan Gedye QC and Richard Mark for the Plaintiff Frana Divich and Charlotta Harpur for the Defendant	
Judgment:	23 January 2019	

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 23 January 2019 at 2:00pm
pursuant to Rule 11.5 of the High Court Rules.

…………………………………
Deputy Registrar

Solicitors:
Richard C Mark, Kerikeri, for the Plaintiff Heaney & Partners, Auckland, for the Defendant Copy for:
Nathan Gedye QC, Auckland, for the Plaintiff

RINTOUL GROUP LIMITED v ROBSON [2019] NZHC 21 [23 January 2019]

[1]	Ms Robson, the defendant, applies for summary judgment and to strike out the plaintiff’s claim for misfeasance in public office.

[2]	The Rintoul Group Ltd is an earthworks and construction contractor operating in the Far North. It says that it has an established history of contracting successfully to the Far North District Council. From July 2014 to September 2017 Ms Robson, a civil engineer, was the general manager of infrastructure and asset management at the council. Between 2015 and 2017, The Rintoul Group Ltd tendered for 17 contracts with the council,1 but was unsuccessful in all of them. It says that Ms Robson was responsible for it not being awarded any contracts. It claims that she acted with targeted malice against it to ensure that it would not be awarded any contracts. Alternatively, it says that her role as manager of infrastructure and asset management required her to act in good faith in evaluating tenders and awarding engineering contracts, to make decisions on merit, and not for an improper purpose. She knowingly failed to do so and was aware that her actions would cause loss to The Rintoul Group Ltd. It claims compensatory damages for the contracts not awarded to it and exemplary damages.

[3]	There are three main questions:

(a)	Does Rintoul’s statement of claim meet the procedural requirements for a pleading of misfeasance in public office?

(b)	Can Rintoul make a claim against Ms Robson for four cycleway contracts when it has already successfully sued the council for being excluded from the tender process for those contracts? and

(c)	Has Ms Robson shown that Rintoul’s misfeasance claim cannot succeed on the merits?

1	The contracts were variously to build parts of the Twin Coast Cycle Trail, to repair roads and to carry out upgrades.

[4]	As to the requirements for a claim of misfeasance in public office, in Commissioner of Inland Revenue v Chesterfields Pre-School Ltd the Court of Appeal said:2
[40]	As the tort currently stands, there are two forms of liability; targeted malice and non-targeted malice. And in both forms, the act complained of must be done by a public officer and in the exercise of that officer’s public functions. Further, a fundamental element of the tort, in both forms, is that there must be actual damage or loss suffered by the plaintiff, caused by the public officer’s conduct.

[41]	The two forms of the tort have slightly different requirements concerning the mental element. Targeted malice requires the public officer to have specifically intended to injure a person or persons. This involves bad faith in the sense that the public officer is exercising the public power for an improper or ulterior motive. Non-targeted malice occurs when the public officer acts knowing that he or she has no power to do the act complained of, and that the act would probably injure the plaintiff. This involves bad faith in that the public officer does not believe that his or her act is lawful. The plaintiff must therefore prove two aspects: first, that the officer acted with the knowledge of the illegality of the act, or with a state of mind of reckless indifference as to the illegality of the act. Secondly, that the public officer knew that his or her conduct would probably injure the plaintiff or a person or a class of which the plaintiff was a member, or was reckless as to the consequences of his or her conduct in the sense of not caring whether the consequences happened or not. Subjective - as opposed to objective – recklessness is necessary for both limbs.

[5]	As to the mental elements required for non-targeted malice, it cited with approval Brennan J in Northern Territory of Australia v Mengel:3

The mental element is satisfied when the public officer engages in the impugned conduct, with the intention of inflicting injury or with knowledge that there is no power to engage in that conduct, and that that conduct is inconsistent with an honest attempt by a public officer to perform the functions of the office. Another state of mind which is inconsistent with an honest attempt to perform the functions of a public office is reckless indifference. As to the availability of power to support the impugned conduct and as to the injury which the impugned conduct was calculated to produce. The state of mind relates to the character of the conduct in which the public officer is engaged – whether he is within power or whether he is calculated (that is, naturally adapting the circumstances) to produce injury.

2	Commissioner of Inland  Revenue  v  Chesterfields  Pre-School  Ltd  [2013]  NZCA 53,  [2013] 2 NZLR 679 at [40]-[41].
3	Northern Territory of Australia v Mengel (1995) 185 CLR 307 at 357.

[6]	The cause of action is invariably difficult to prove. Successful cases are rare. There are special pleading requirements: the same as for a cause of action alleging fraud.

[7]	Rintoul relies on both arms of the tort. In the circumstances of this case the facts are likely to overlap both elements. The gist of its case is that Ms Robson was determined and made sure that it should not get any contracts. If it proves that, it is likely to establish its case under both heads. It would be otherwise if, say, a council officer had a corrupt preference for another contractor and made sure that that contractor got council work to the exclusion of others. That would come under only the second arm.

[8]	There has already been litigation about four of the contracts, for the Twin Coast Cycle Trail. Rintoul successfully sued the Far North District Council for not being awarded those contracts. In The Rintoul Group Ltd v Far North District Council Downs J found that in excluding Rintoul from the tender process for the four contracts, the council breached a process contract for each tender, and that the company would have had a 50 per cent chance of being awarded the contracts, had it not been excluded.4 Downs J did not refer to Ms Robson in his decision. She did not give evidence. While he found that the council was not justified in excluding Rintoul from each tender process, that was because the reasons given for exclusion were not objectively sound, not because anyone in the council was wilfully misguided or had it in for Rintoul.

The evidence

[9]	The evidence for Ms Robson is directed at showing that she cannot be liable for misfeasance because the council had sound, clear and transparent systems for awarding contracts which required tenders to be assessed objectively on their merits and cut out the risk of personal factors affecting decisions. The council followed those procedures. Ms Robson did not evaluate tenders. While she had a role in the process, she generally did no more than act on recommendations of tender evaluation teams.

4	The Rintoul Group Ltd v Far North District Council [2017] NZHC 1132.

[10]	The council’s procedures for awarding contracts by tender are based on central government models, including the New Zealand Transport Agency, which funds some of the council’s infrastructure work. Those bidding for contracts submitted their tenders in two sealed envelopes – one to include the tender and non-price attributes, the second to enclose the price of the tender. That was so that the non-price attributes of each tenderer were assessed without knowing who submitted the lowest price tender. Under the NZTA procurement procedures, the non-price attributes envelope was opened by the tenders’ secretary with a witness. If the tender complied with the tender documents it was distributed to members of a tender evaluation team. The NZTA procurement manual describes how tenders are to be assessed. Ratings were applied to non-price attributes: relevant experience and track record, relevant skills, resources and methodology. The tender evaluation team produced a tender evaluation report, which recommended a tenderer. If a tenderer had not reached the minimum score required for non-price attributes, that tender was considered as having failed and was not considered further. The price envelope for that tender would not be opened. For those tenders that passed on non-price attributes, their prices were considered. Tenderers who scored higher on non-price attributes benefited from a supplier quality premium adjustment to their bids. While the tender evaluation team recommended which tender should be accepted, it did not have the last word on awarding the contract. The teams’ reports went to Ms Robson to approve as general manager of infrastructure and asset management. She was never a member of a tender evaluation team. She had delegated authority to grant contracts for less than $250,000. The chief executive of the council had authority to grant contracts for between $250,000 and
$500,000. Contracts for higher amounts went to the full council. Until 30 June 2016 the evaluation teams were in Ms Robson’s department of the council but after that a Roading Business Unit with a different manager was responsible for evaluating tenders. That manager did not have authority to sign off contracts so they came to Ms Robson instead. She says that she always followed recommendations as to who to award a contract to. She left the council in September 2017 and now works in the private sector.

[11]	A procurement specialist in the council has made a desk-top review of the council documents for all 17 contracts. In only one case (contract 5/16/011) did Rintoul pass on non-price attributes. That contract went to another tenderer who had

made a lower bid. For most of the other contracts, Rintoul failed on non-price attributes. Four of those contracts were the subject of other litigation. In one case (contract 5/17/500) the council did not use an open market tender, but a closed tender: selected contractors were invited to tender. That is said to be for technical reasons relating to the job: it was done on a design and build basis. Only one tender was received. In two cases (contracts 7/17/209 and 7/17/114) the disqualifying non-price attribute was “lack of trust and confidence” because of proceedings Rintoul had brought against the council. In no case did a tender evaluation team recommend Rintoul for a contract. Ms Robson was not a member of any tender evaluation team. She claims she did not reject any recommendations.

[12]	Rintoul’s pleading refers in particular to a contract for the upgrade of the Waimatenui Road Bridge. The evidence for Ms Robson is that there were two tenders, in December 2015 and August 2016. The first time the bids came in over-budget and the council did not accept them. The job required installation of 10 m long timber piles. The council decided to obtain geotechnical information so that the contractors had better information on which to price. The second time Rintoul failed on non-price attributes, experience and track record, and skills. The contract went to the only other tenderer.

[13]	Now for Rintoul’s evidence in opposition. Mr Rintoul, the company’s director, does not accept the reason given for not awarding the Waimatenui Road contract in the first tender. His company’s bid was lower. There was no justification for obtaining geotechnical information as the existing bridge piles had been in place for 60 years. It was just a ploy by Ms Robson to make sure that his company did not get the contract.

[14]	Mr De Pereira, a civil engineer now in Queensland, was the council’s Manager Infrastructure Capital Works from July 2015 to April 2016. He reported to Ms Robson. All tender evaluation reports required Ms Robson’s approval before contracts were awarded. Under procedures she put in place, he reviewed the tender evaluation team reports and made recommendations or endorsements to Ms Robson. In his experience Ms Robson could and did influence how the council awarded contracts. She did not always approve recommendations made by him and tender evaluation teams. She would request reviews of the teams’ recommendations and at times questioned the

suitability of team members. On occasions she picked the team members. He believed there were “conflict of interest” issues. There had been an arbitration with Rintoul. Afterwards he gave her an evaluation team recommendation for a cycleway contract to go to Rintoul. She told him that she was not going to give Mr Rintoul another contract, and told him to reconsider the recommendation. Another time he refused to change his recommendation for a contract to go to Rintoul. She sat on the matter for weeks. The matter went to the chief executive officer. Ms Robson reluctantly signed the contract only after the chief executive officer approved it. He was aware of other cases where evaluation teams recommended Rintoul, but Ms Robson delayed signing. On the Waimatenui Road Bridge upgrade the evaluation team recommended Rintoul in the first tender. He endorsed that. He and the project engineer, a structural engineer, visited the site and agreed that there was no need for a geotechnical investigation. It was clear from one-on-one discussions that Ms Robson had preferences on contractors, even if she did not record them in writing. Ms Robson did influence the award of contracts and was biased against Rintoul.

[15]	Mr Schollum, Rintoul’s contract administrator, provides supporting evidence on the Waimatenui Road Bridge upgrade, including a council document in February 2016 that Rintoul was the preferred contractor. The council had advised Rintoul in March 2016 that it would get the contract. On the contract which Rintoul missed on price (5/16/011), he says that the council used a GST inclusive figure, whereas bids are assessed on a GST exclusive basis. He takes issue with other aspects of the procurement specialist’s evidence.

[16]	The seven affidavits in reply, all by council officers apart from Ms Robson and a consulting civil engineer involved with one of the contracts, mainly cover these matters: selection of tender evaluation teams (in which Ms Robson was not involved), the tender evaluation for the four cycleway contracts, the absence of any influence by Ms Robson on the decisions of tender evaluation teams (apart from checking and proofing them), an explanation for the GST issue in contract 5/16/011, the Waimatenui Road bridge upgrade, including an explanation for changing weightings between price and non-price attributes, and comments on performance issues for Mr Pereira.

Does Rintoul’s statement of claim meet the procedural requirements for a pleading of misfeasance in public office?

[17]	Rule 15.1 of the High Court Rules 2016 allows the court to strike out a pleading on well-known grounds: that it does not disclose a reasonably arguable cause of action or defence, that it is likely to cause prejudice or delay, that it is frivolous or vexatious or that it is otherwise an abuse of process. It may also stay or dismiss a proceeding. While the rule is concerned with the soundness of pleadings, attacks on pleadings may go to substantive or procedural matters. A pleading may be substantively defective because on the facts pleaded it cannot succeed at law, or does not show a recognised cause of action,5 or there is a clear affirmative defence on the merits.6 A pleading may also be struck out for procedural defects, but as many procedural defects may be repaired, the court will in appropriate cases give a party the opportunity to amend.7 Here Ms Robson says that the statement of claim is procedurally defective: there are insufficient particulars and there is no evidential basis for the allegations.

[18]	As for particulars, the application said that the statement of claim did not give particulars of facts for Rintoul’s allegations that Ms Robson acted:

(a)	unlawfully and knowingly;

(b)	contrary to the public tender documents;

(c)	so as to influence the outcome of the tender evaluation process;

(d)	in bad faith; and/or

(e)	with malice.

5	See the well-known test recognised in A-G v Prince [1998] 1 NZLR 262 (CA).
6	For example, limitation, as in Murray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721 at [33].
7	See Tipping J’s dictum in Marshall Futures Ltd v Marshall [1992] 1 NZLR 316 (HC) at 207, distinguishing between a pleading “which is a total write-off and one which is deficient but is capable of effective repair.”

[19]	In response, Rintoul filed a second amended statement of claim, which gave further particulars. At the hearing, Ms Divich for Ms Robson did not submit that the request for particulars had not been met. In any event I am satisfied that it has been.

[20]	The second amended statement of claim includes these:

[16]	The defendant acted with targeted malice in that her conduct, as pleaded in paragraph 15 above, was specifically intended to injure the plaintiff by causing them to miss out on contracts which would otherwise have been awarded and the defendant thereby acted in bad faith for an improper purpose.

[17]	In the alternative to paragraph [16] above, the defendant acted with non-targeted malice in that she acted as pleaded in paragraph 5 above knowing that she had no power to do so and that her acts would probably injure the plaintiff by causing it to miss out on contracts it would otherwise have been awarded.

It gives combined particulars for the separate allegations in these paragraphs, which I paraphrase:

(a)	Ms Robson was actively engaged in considering, evaluating, deciding, granting all the contracts in issue.

(b)	She was the senior manager to whom the evaluation team reported on tender assessments and it was her responsibility to decide on granting contracts following tenders and, as required, to make recommendations on granting contracts to the mayor and council.

(c)	After an arbitration proceeding involving the Mangakahia Road slip and in retaliation for Rintoul having brought that proceeding, she decided that she would ensure that it would be awarded no more contracts regardless of merit or tender terms - as stated to Mr De Pereira.

(d)	She created objections and difficulties in relation to Rintoul’s tenders that had no reasonable basis in fact. She did this to stop the contract for the Waimatenui Road Bridge upgrade being awarded to Rintoul.

(e)	She delayed signing off contract offers to stop the Waimatenui Road Bridge upgrade contract being awarded to the plaintiff.

(f)	She used her influence and power to select panel members for tender evaluation teams and further to influence those team members to not recommend that Rintoul be awarded contracts.

(g)	She departed from the public tender documents and requests for proposals by using her management power to influence the outcome of each of Rintoul’s tenders.

(h)	Rintoul was in almost every case the lowest tenderer, with a good track record of completing contracts on time and within budget but, despite these merits, Ms Robson ensured that Rintoul’s tenders were unsuccessful by her selection of members of the tender evaluation teams, influencing the outcomes of tender evaluation teams, and by excluding Rintoul from tender consideration. Certain contracts are referred to.

(i)	Her actions were unlawful in that they involved:

(i)	A deliberate disregard of her official duties and obligations;

(ii)	Breaches of the process contracts for each tender; and

(iii)	Procuring her employer’s breaches of ss 14(1)(a)(i) and 14(1)(f), 1491)(g) and s 77 of the Local Government Act 2002.

She is alleged to have acted with the knowledge and intention that she would cause damage to Rintoul’s financial and reputational interests by causing it to miss out on contracts which it would otherwise have been awarded.

[21]	In support of the claim for exemplary damages Rintoul pleads that Ms Robson acted with flagrant disregard for its rights and interests. In particular her high-handed

conduct was directed specifically at The Rintoul Group Ltd with complete disregard for its rights and interests as a contract tenderer. Particulars given are:

(a)	the decision to require additional geotech investigation on the Waimatenui Bridge upgrade after Rintoul had been identified as the preferred tenderer and recommended for the contract;

(b)	her statement that she was not going to award Rintoul another contract;

(c)	her decision to exclude Rintoul from the four cycle-way contracts;

(d)	her decision to exclude Rintoul from tender consideration on the ground that it was involved in litigation against the council; and

(e)	her decision to exclude Rintoul from the tenders was invalid in circumstances where she knew the reasons were invalid and that harm would be caused to it.

[22]	A pleading of misfeasance in public office has the same requirements for particulars as for a cause of action for fraud, dishonesty or other reprehensible conduct.8 Plaintiffs are required to make sure that they have a proper basis for alleging fraud, to plead it clearly and to give adequate particulars. The Court of Appeal stated the standard approach in Schmidt v Pepper New Zealand (Custodians) Ltd:9
Allegations of fraud or dishonesty are very serious. They must be pleaded with care and particularity. As the authors of Bullen & Leake & Jacobs Precedents of Pleadings emphasise, counsel must not draft any originating process or pleading containing any allegation of fraud unless they have reasonably credible material which, as it stands, establishes a prima facie case of fraud – that is, material of such a character which would lead to the conclusion that serious allegations could properly be based upon it. Fraud cannot be left to be inferred from the facts – fraudulent conduct must be distinctly alleged and as distinctly proved. General allegations, however

8	Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 (HL), the judgment of  22 March 2001, at [55] and [184]-[189].
9	Schmidt v Pepper New Zealand (Custodians) Ltd [2012] NZCA 565 at [15]. For the responsibility of counsel in alleging fraud or other reprehensible conduct, see X v Y [2000] 2 NZLR 748 (HC) at
[58] and the Lawyers Conduct and Client Care Rules 2008, r 13.8.

strong the words may appear to be, are insufficient to amount to a proper allegation of fraud.

[23]	In a different context (a proceeding to set aside a judgment on the grounds that it was fraudulently obtained), the Supreme Court has taken a similar position on allegations of fraud, saying that “[t]he plaintiff’s claim of fraud must be one that is fully and precisely pleaded and particularised and of sufficient apparent cogency that it should go to trial.”10 It also indicated that the adequacy and cogency of the pleadings could be tested by a strike-out application under r 15.1 of the High Court Rules:11
So where a defendant in a proceeding involving the fraud exception applies to strike it out, the plaintiff is required to discharge the onus of showing it has a case with an evidential foundation amounting to a prima facie case of fraud.

[24]	Even allowing for the extra emphasis on adequate particulars for a misfeasance claim, I am satisfied that the second amended statement of claim gives Ms Robson enough to inform her both generally and specifically of the case that she has to meet. After all she knows enough to file a summary judgment application in response. There are other parts of the second statement of claim where more particulars are required. Rintoul will need to plead the amount of damages it seeks before the close of pleadings date. But Ms Robson has not requisitioned for that. The particulars part of her strike out application does not succeed.

[25]	The other part of her strike out application is that there is insufficient evidence to support the allegations of misfeasance in public office. In response Mr Gedye QC submitted that there is no such requirement. He accepted the need for adequate particulars and that a plaintiff must have some basis before it can begin a proceeding, but said that a plaintiff does not have to show the evidential basis for its case at the outset. It should be allowed to establish its case through the usual interlocutory steps including discovery.

[26]	The authorities in [21] and [22] above, Schmidt v Pepper New Zealand (Custodians) Ltd and Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd, are against that submission. In Redcliffe, the Supreme Court accepted that a strike

10	Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1 NZLR 804 at [33].
11	At [33].

out application could be used to check whether a plaintiff had an adequate evidential basis at the start of the proceeding. Under Schmidt, the material must be reasonably credible and would lead to the conclusion that serious allegations could be based on it. The purpose is clear – to make sure that a defendant is not required to answer a case alleging dishonest or equally reprehensible conduct unless the plaintiff has a proper basis for doing so. The plaintiff must demonstrate that proper basis not only with a sound pleading but also evidential support for it. The assessment whether the plaintiff has the appropriate evidential basis for its case is not a mini-trial. The focus is primarily on its case. Caution is required in accepting evidence from the defendant that is said to discredit the plaintiff’s case.

[27]	At this stage, much of the evidence for Rintoul is equivocal. It is also consistent with council officers making unsound decisions, but not acting in bad faith. But Mr De Pereira’s affidavit goes further than that. He gives first-hand evidence of Ms Robson stating that she did not intend Rintoul to have a contract. Her conduct in rejecting the recommendation for the Waimatenui Road bridge upgrade to go to Rintoul is in line with her alleged intention. His evidence goes to intentional misconduct by Ms Robson. The evidence in reply tries to undermine Mr De Pereira’s evidence by referring to alleged unsatisfactory aspects of his employment, none of which are relevant to the issues in this case. There is a clear conflict between his evidence and the witnesses for Ms Robson, but that is to be resolved at trial. I cannot say on this application that his evidence is so tenuous that it cannot be accepted as showing an evidential basis for Rintoul’s case. If his evidence as to the Waimatenui Road bridge upgrade is accepted, it will also open the door for the other contracts for Rintoul.

[28]	In summary I am satisfied that the second amended statement of claim meets those pleading requirements that Ms Robson put in issue.

Can Rintoul claim against Ms Robson for the four cycleway contracts when it has already successfully sued the council for being excluded from the tenders?

[29]	Ms Robson says that the proceeding is an abuse of process for the four cycleway contracts, because Rintoul has already successfully sued the Far North

District Council for not being awarded those contracts.12 This objection is procedural, not substantive.13

[30]	As already noted, Downs J found that in excluding Rintoul from the tender process for the four contracts, the council breached a process contract for each tender and that the company had a 50 per cent chance of being awarded the contracts, if it had not been excluded. By agreement of the parties he did not however fix the damages. There was no evidence that the damages had been fixed or paid.

[31]	In a minute of 22 November 2018 I asked the parties to advise what happened after Downs J’s judgment. In a joint memorandum in response they provided a copy of a settlement agreement between Rintoul and the council dated 26 March 2018, made after Downs J’s judgment. They advised that the agreement was confidential and should not be searchable on the court file. The council and Rintoul consented to disclosure of the agreement to the court, but no further. For this case it is not necessary to go into the commercial aspects of the agreement. Those are the aspects which I expect the parties want to keep confidential. But I can say that the parties agreed to settle outstanding matters under the judgment. The agreement was in full and final settlement of any claims that had been or could be made against the council arising out of the subject matter of the proceeding. It included this term:

Upon execution of this agreement by the parties the Defendant shall be fully discharged from any and all liability arising directly or indirectly out of the subject matter of the Proceeding.

Rintoul did not reserve the right to sue others who might be jointly liable with the council. With that, I invited counsel to address whether Ms Robson could claim the benefit of that release as a joint tortfeasor. That is a substantive question.

[32]	The release issue arises this way. At common law persons who together committed a single tort against a plaintiff were jointly responsible for it. They are to be distinguished from concurrent tortfeasors who are liable in tort but not for a single tort; their liability arises from distinct wrongful conduct. A claim in tort against joint

12	The Rintoul Group Ltd v Far North District Council [2017] NZHC 1132.
13	Brisbane City Council v Attorney General for Queensland [1979] AC 411 (PC) at 425; Johnson v Gore Wood & Co [2002] 2 AC 1 (HL) at 59.

tortfeasors was one and indivisible. That led to the judgment rule: that a judgment against one joint tortfeasor was a bar to the plaintiff later suing another joint tortfeasor. The right to enforce the merged judgment replaced the right to sue in tort. As the indivisible right to sue had gone, there was nothing on which to sue other joint tortfeasors. It also led to the release rule: that the release of one joint tortfeasor discharged all. The rationale was “that the cause of action, which is one and indivisible, having been released, all persons otherwise liable thereto are consequently released.”14 A covenant not to sue was held not to be a release. The judgment rule was abrogated by s 17(1)(a) of the Law Reform Act 1936:

17	Proceedings against, and contribution between, joint and several tortfeasors

(1)	Where damage is suffered by any person as a result of a tort (whether a crime or not)—

(a)	judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage:

It did not however expressly change the release rule. In two decisions the Court of Appeal held that the release rule still applies: Brooks v New Zealand Guardian Trust Co Ltd and Allison v KPMG Peat Marwick.15

[33]	An employer is vicariously liable for a tort committed by an employee in the course of their employment. They are therefore joint tortfeasors.16 Under the settlement agreement the council was discharged from all liability relating to the four contracts. That includes tortious liability and vicarious liability for torts by employees. As her employer was discharged under the settlement agreement, it appears that Ms Robson as a joint tortfeasor can take the benefit of the release.

[34]	For Rintoul, Mr Gedye QC acknowledged that it had received appropriate compensatory damages for the four cycleway contracts. It was not seeking additional

14	Duck v Mayeu [1892] 2 QB 511 (CA).
15 Brooks v New Zealand Guardian Trust Co Ltd [1994] 2 NZLR 134 (CA) at 140, upheld on appeal, but on another point; New Zealand Guardian Trust Co Ltd v Brooks [1995] 1 WLR 96; Allison v KPMG Peat Marwick [2000] 1 NZLR 560 (CA) at [113] and [136].
16	Jones v Manchester Corporation [1952] 2 QB 852 (CA) at 869; Allison v KPMG Peat Marwick
at [111] and [136].

compensation, but it wanted to keep its claim for exemplary damages against her alive. He submitted that the release rule had been changed by a more recent decision of the Court of Appeal, Robinson v Tait.17

[35]	That decision of a full court considered s 37(6) of the Securities Act 1978, which imposed joint and several liability on issuers of securities and their directors if certain subscriptions were not repaid within two months. The plaintiffs had sued the issuer and settled for a part payment without expressly reserving their rights against the directors. The Court of Appeal upheld their right to sue the directors. The release rule did not apply, because the release of the company did not bar the claims against the directors for their several liability. The judgments discuss the release rule, but as they all agreed that the rule did not apply, their comments are obiter. They considered the decision of the High Court of Australia in Thompson v Australian Capital Television Pty Ltd,18 which held that under a provision19 similar to s 17(1) of the Law Reform Act 1936 joint liability was no longer one and indivisible. That decision had not been cited in Allison v KPMG Peat Marwick. Thomas J considered that Thompson v Australian Capital Television Pty Ltd should be followed. Tipping J disagreed and considered that Brooks v New Zealand Guardian Trust Co Ltd should still be followed. Blanchard, Keith and McGrath JJ noted difficulties in the joint judgment of Brennan CJ, Dawson and Toohey JJ and that the High Court had not considered Brooks v New Zealand Guardian Trust Co Ltd, which reached a different conclusion. They said that it was not necessary to decide whether the High Court was correct and set out the matters to be considered:20

The correctness of that view would seem to depend upon whether the abrogation of the judgment rule has the result that a plaintiff must now be considered to have ab initio separate causes of action against each joint tortfeasor – that they have each committed separate torts – but, presumably, still without need to prove a particular individual contribution to the overall loss; or whether, on the other hand, all that has happened is that the legislature has said that, despite the unitary nature of the tort, the consequence of entering judgment against one wrongdoer is not to be that a proceeding against another is barred. On the latter view, the judgment rule and the release rule are subsets of the unitary tort rule, with one of the subsets (the judgment rule) being reformed, without change either to the basic rule or to its other subset (the release rule).

17	Robinson v Tait [2002] 2 NZLR 30 (CA).
18	Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574.
19	Law Reform (Miscellaneous Provisions) Act 1955 (ACT), s 11(2).
20	Robinson v Tait at [62].

They also commented adversely on some of the policy justifications suggested for the release rule.21 These obiter comments on the merits of the release rule are not enough to do away with the rule. If the court had meant to overturn the rule, it would have said expressly that Brooks v New Zealand Guardian Trust Co Ltd was no longer good law. It did not. Accordingly, the release rule still applies. It bars Rintoul’s claim against Ms Robson for the four cycleway contracts in The Rintoul Group Ltd v Far North District Council.22 It gives her an affirmative defence to that part of Rintoul’s claim. The parts of the second amended statement of claim that refer to the four cycleway contracts in the earlier case are struck out.23

[36]	Rintoul has already received compensatory damages for those contracts. The strike out means that it can no longer sue Ms Robson for exemplary damages for those contracts. But it can still run its claim for those damages for the other contracts.

[37]	I have not so far dealt with the original ground of the strike out application: that the proceeding is an abuse of process because Rintoul is suing again on something already decided in court. That is sound in so far as it relies on the council having paid compensatory damages for the loss of the cycleway contracts. If a claim has been satisfied, it is extinguished.24 That gives a defence to anyone else sued by the satisfied plaintiff, whether the defendant is a joint tortfeasor or not. But that would not necessarily get rid of the claim for exemplary damages. In so far as the council’s liability is vicarious, it cannot be liable for exemplary damages.25 Leaving aside the release rule, there is nothing untoward in a plaintiff who has obtained partial relief (compensatory damages) from one defendant bringing a claim against another defendant for relief that it could not obtain against the first defendant.

21	At [63]-[64].
22	The Rintoul Group Ltd v Far North District Council [2017] NZHC 1132.
23	The references are in paragraphs 12, 18.1, 18.9(e)-(h) and the schedule of the second amended statement of claim.
24	Allison v KPMG Peat Marwick at [125].
25	Couch v Attorney-General (No 2) [2010] NZSC 27, [2010] 3 NZLR 149 at [158].

Has Ms Robson shown that Rintoul’s misfeasance claim cannot succeed on the merits?

[38]	This is the summary judgment question. The Court of Appeal laid down the principles for defendants’ summary judgment applications in Westpac Banking Corporation v MM Kembla New Zealand Ltd.26    They do not require repetition.    Ms Robson filed her application for summary judgment at the same time as she filed her statement of defence. The application is accordingly within time under r 12.4(2) of the High Court Rules.

[39]	For her application Ms Robson says that a judgment on the merits can be made now without the need for any interlocutory steps such as discovery and without a full trial with witnesses giving evidence in person and subject to cross-examination. She relies on the council’s systems for tenders for contracts, which are directed at ensuring an impartial and objective assessment of tenders applying set criteria, and her role, which did not involve assessment of tenders and in which she did no more than accept recommendations by tender evaluation teams. Her evidence has extensive documents to prove her case.

[40]	Her case is impressive and may prevail at trial. She certainly makes Rintoul’s case look weak. But in a defendant’s summary judgment application it is not enough find that a plaintiff’s case is weak. The application can be granted only if the court is satisfied that the plaintiff cannot succeed. The difficulty for Ms Robson is Mr De Pereira’s evidence. As noted above, it points to intentional misconduct by Ms Robson in deciding the tender of the Waimatenui Road Bridge upgrade. It also suggests that notwithstanding the council’s careful systems, there was room for a manager’s preferences to influence tender decisions. Ms Robson’s evidence in reply gives an explanation consistent with conduct untainted by animus against Rintoul. But just as with the strike-out application I cannot dismiss Mr De Pereira’s evidence as so implausible or lacking in credibility that it should be rejected. I cannot and should not resolve the conflict between Mr De Pereira and the evidence for Ms Robson. That means that the summary judgment application cannot succeed.

26	Westpac Banking Corporation v MM Kembla (New Zealand) Ltd [2001] 2 NZLR 298 (CA) at [58[-[64].

Outcome

[41]	While Ms Robson has had the four cycleway contracts excluded from the case, she has not succeeded on the rest of her strike-out application or on the summary judgment application. The case will continue on the remaining contracts. Rintoul has generally prevailed and is entitled to costs.

[42]	I make these orders:

(a)	The parts of the second amended statement of claim relating to the four cycleway contracts are struck out;

(b)	Subject to that, the applications for strike-out and summary judgment are struck out;

(c)	Ms Robson will pay costs on the applications to Rintoul. If the parties cannot agree costs, memoranda may be filed;

(d)	The Registrar is to allocate a telephone case management conference for further directions;

(e)	The copy of the confidential settlement agreement between Rintoul and the Far North District Council is not to be accessed except by order of a judge and after notice has been given to the parties and the council; and

(f)	Leave is reserved to apply for further directions.

……………………………….
Associate Judge R M Bell