Pacific Properties Ltd v Tonga Power Ltd [2024] TOCA 19; AC 12 of 2024 (20 November 2024)

IN THE COURT OF APPEAL OF TONGA

CIVIL JURISDICTION
NUKU’ALOFA REGISTRY

[AC 12 /2024]
[CV 76/2022]

BETWEEN

PACIFIC PROPERTIES LIMITED
First Appellant

AND
LEIOLA GROUP LIMITED
Second Appellant

AND

TONGA POWER LIMITED

Respondent

Hearing: 14 November 2024
Court: Randerson J
Heath J
Dalton J
Counsel: Teimumu Tapueluelu for the Appellants
: William Edwards for the Respondent
Respondent
Judgment: 20 November 2024

JUDGMENT OF THE COURT

[1] This is an appeal against a decision to strike out part of the further amended statement of claim in this proceeding. Because the decision below was an interlocutory decision, the appellant needs leave to appeal – s 10(1)(b) Court of Appeal Act. In our view that leave should be given, because the appellant should succeed, in part, on this appeal.

Nature of Claim in Trial Court

[2] The further amended statement of claim alleges that Pacific Properties Limited and Leiola Group Limited are companies owned and controlled by one John Paul Chapman. Until June 30, 2021 he worked for, and was a director of, Tonga Power, a Public Enterprise under the Public Enterprises Act 2003. One week after he resigned from this role, Mr Chapman contacted Tonga Power to see if his companies could rent a shed Tonga Power owned, called the TPL shed in the pleadings. Negotiations then ensued; Pacific Properties Limited acted as agent for Leiola Group Limited in these negotiations. On 12 November 2021, a written agreement was reached on the basis that the TPL shed would be leased at TOP$3000 per month, from 1 January 2022, for two years, and then the appellants would buy the shed for TOP$600,000. The written agreement spelled out all essential terms, although it was contemplated that further formal documents would be entered into.

[3] In December 2021, and thereafter, Tonga Power did not give possession of the TPL shed to the appellants, but did affirm that they had reached agreement in relation to the lease and sale of the TPL shed. Tonga Power blamed delays in giving possession on the slow preparation of lease documents. Then in August 2022 Tonga Power refused to formally document the agreement and denied the existence of a binding agreement; it asserted that there was never to be a binding agreement until the formal documents were signed.

[4] The appellants plead that there was a binding agreement reached. In the alternative, they say there is a claim based on promissory estoppel.

[5] Under the heading “Damages”, at paragraph 59 of their pleading, the appellants plead that in an attempt to settle the matter before commencing proceedings, they wrote to Tonga Power and told it of the damages they would suffer if Tonga Power did not grant the lease and sale it had promised. Paragraph 60 of the pleading originally set out the detail of that communication.

[6] Untidily, as the proceeding has progressed, and the statement of claim has been amended, the pleading at paragraph 60 has been amended to reflect the appellants’ current claimed loss and damage in the proceeding. In the current version of paragraph 60, the appellants say they have suffered loss in the amount of TOP$1.59 million, particularised as follows:

• (a) TOP$44,238 being the difference in rent between the shed the second appellant currently rents, and the cheaper rent promised under the November 2021 agreement over the two promised years of lease – (60(a)).
• (b) TOP$40,000 wasted costs said to have been incurred in legal fees and other professional costs in preparation for entry into the November 2021 agreement and the formal agreement which did not eventuate – (60(b)).
• (c) TOP$1.206 million “for net loss of future profit being the present value of rental savings lost...calculated on a 20 year period ... [as] further assessed and reconfirmed by the [appellants’] qualified accountant Mr Wayne Madden.” -– (60(c)).
• (d) Legal costs in the proceeding – (60(d)).
• (e) TOP$300,000 for repairs which the appellants say will be necessary to the TPL shed after it was damaged by the volcanic eruption and tsunami in 2022, and general wear and tear– (60(e)).
  

[7] On analysis, it can be seen that the damages claims at paragraphs 60(a) and (b) are made independently of the claim for specific performance; that is, they are claimed whether or not the Court grants specific performance. The claim at paragraph 60(e) could only be made if specific performance is granted. The claim at paragraph 60(c) is largely in the alternative to an order for specific performance; that is, except for a period between when the sale ought to have taken place and a judgment for specific performance, the claim could be granted only if an order of specific performance were not made.

[8] Paragraphs 61-70 of the further amended statement of claim detail failed attempts to settle the dispute before the proceeding was commenced. There follow numbered paragraphs under the heading “Wherefore the Plaintiffs Pray For”. The first of these (paragraph 71) is a claim for specific performance of the November 2021 agreement. The second (paragraph 72) is a claim for damages in the amount of TOP$384,238. This sum is particularised as comprising the amounts at 60(a), (b) and (e). Paragraph 73 is said to be in the alternative to the claims at paragraphs 71 and 72. It is in an amount of TOP$1,209,238. This is particularised as comprising the amounts at 60(a), (b) and (c).

[9] Relevantly to the issues on this appeal, the defence admits that there were negotiations between the parties, but denies that: 1) the parties agreed on all necessary terms; 2) the parties agreed on the same set of terms and conditions, and 3) the Board of Tonga Power ever approved the terms and conditions asserted by the appellants, or entry into a formal agreement. Thus the respondent’s primary position is that there was no binding contract. However, as an alternative plea, the respondent says that the Court should have not grant the equitable remedy of specific performance because the appellants do not have clean hands: Mr Chapman had a conflict of interest.

[10] There is a long reply filed by the appellants, but we need not concern ourselves with it on the present appeal.

Application Before Whitten LCJ

[11] On 4 and 5 July 2023 Whitten LCJ heard an application made by Tonga Power to adjourn the trial dates in this matter. It was said that the appellants had not made discovery; they were ordered to do so. Further, the appellants had filed affidavits of evidence from Mr Madden (see paragraph 60 of the further amended statement of claim above). Whitten LCJ described these affidavits as going to the appellants’ “claim for the difference in rent they are currently paying and that which would have been paid to the [respondent] had the alleged agreement been effected commencing from January 2022 and an alternative claim for alleged loss of future profits totalling over $1.2 million...”. On hearing of the application, Tonga Power said that these affidavits took it by surprise and that it needed time to respond. Whitten LCJ vacated the trial dates; made orders in relation to discovery; affidavits of evidence, and other matters which need not concern this Court.

[12] In the course of hearing the application, the following exchange took place between counsel for the appellants and Whitten LCJ:

“832 Court Alright. Now, thank you for that. On this question of alternative

833. claims by the Plaintiffs, I’ll ask you the same question I asked
834. Mr Edwards, in what circumstances or upon what findings does
835. the Plaintiffs’ alternative claim for loss of future profits arise?

836 Ms Tapueluelu Your honour again, it is a strategic thing where, covering all

837. basis, and the Plaintiffs’ obviously is entitled to do so, there has
838. not been anything raised by the Defendant that alludes to ready
839. the Court from. Should the Plaintiffs be successful from
840. granting the primary relief, which a specific performance and

841 possession, (inaudible) in that case, there will be no need for

842. loss of future profit be of issue.

843 Court Well in what circumstance might it arise?

844 Ms Tapueluelu The only circumstance your honour if whether it is a law that

845. will (inaudible) from granting possession of the shed to the
846. Plaintiffs. There was in the beginning, in the original Statement
847. of Defence, a suggestion by the Defendant that the dealing or
848. the tentative agreement was unlawful dealings of the land under
849. section 13 of the Land Act. Well we say to that is, and we
850. understand that particular item is no longer entertained by the
851. Defendant. Because (inaudible) in there that says that the
852. (inaudible) has approved the extended, and then now when we
853. are aware and we are supportive of the agreement. So that
854. particular item, that is raised in the original pleading by the
855. Defendant is where we had based of our alternative claim from
856. the

857 Court So is there any present scenario based on the respective pleaded

858. cases, in which the alternative claim for future loss of profit
859. damages, could arise in this case?

860 Ms Tapueluelu Not that I am aware of your honour. I understand section 13

861. defence, our (inaudible) has not been further raised.

862 Court So it falls away, does it?

863 Ms Tapueluelu It does fall away your honour.

864 Court And therefore there is no reason for the defendant to have to

865. deal with Mr Madden’s evidence. Is that the position?

866 Ms Tapueluelu Correct. The lawsuit say (inaudible) savings your honour which

867. you correctly referred to earlier, is information as to who he is,
868. which is basically the loss of rent that the Plaintiffs has suffered
869. because they were not paying the ladder rent of $3,000, and that
870. your honour does not require expert evidence. What it is, is
871. there’s a (inaudible) that the original rent was $6,000 or the
872. current rent $86,000 and obviously based on the draft
873. agreement, the rent paid if it had any (inaudible) of the property
874. on the 1^st of January 2022, the differences between the two rent,
875. all is needed is to calculate the lost rent (inaudible).

876 Court Well, let me just make sure I’ve got this clear and I will record it

877. as such. Is it your clients position that Mr Madden’s expert
878. evidence is only being relied upon by the plaintiffs for the
879. component of his calculations concerning the rent differential
880. between what the plaintiffs have continued to pay, apparently to
881. Dateline or National Transport, since January last year,
882. compared to what they should have been paying, a lesser
883. amount to TPL during the alleged first part of the agreement for
884. a two-year tenancy?

885 Ms Tapueluelu Correct your honour (inaudible)

886 Court So that is about thirty to forty thousand pa’anga?

887 Ms Tapueluelu Correct your honour

888 Court So the rest of the 1.2 million odd falls away

889 Ms Tapueluelu Correct your honour

890 Court Not being pressed, is that right?

891 Ms Tapueluelu No, no

892 Court Well, now, Mr Edwards, did you know that?

893 Mr Edwards No sir, it is the first time I’ve heard it your honour.”

[13] In his reasons for orders made on the application, Whitten LCJ said:

“Neither counsel could identify or posit from the pleadings any circumstance or finding upon which the [appellants’] alternative claim for loss of future profits circa $1.2 million might arise. [Counsel for the appellants] described the claim as a ‘strategic thing to cover all bases’. She acknowledged that if the [appellants] succeed on their primary claim that there is an enforceable contract between the parties and specific performance of that contract is ordered, then the alternative [claim] would not arise. Conversely, if the [appellants] did not succeed on the primary issue, then there would also be no basis for a claim for damages and the pleaded cause of action in promissory estoppel would not advance the case or support a damages claim. [Counsel for the appellants] then qualified that proposition by saying that the claim might only arise ‘if there is a law that prevents the Court from making orders for the [appellants] to take possession of the shed.’ However, when asked to articulate any such law, and upon further examination of the pleadings, [counsel for the appellants] noted that a previous reference to any alleged contract being unlawful pursuant to s.13 of the Land Act was no longer pressed and there is no other pleaded basis upon which the alternative claim for damages might arise. On that basis, counsel for the [appellants] formally abandoned reliance upon that alternative claim, and with it, reliance upon the corresponding evidence of Mr Madden in his affidavit and supporting calculations. That position should be formalised by a further amendment to the current Statement of Claim.”

[14] This passage is somewhat ambiguous. It is difficult to know whether Whitten LCJ was referring to all the appellants’ damages claims being without foundation, or just the alternative damages claim pleaded at paragraphs 60(c) and 73 of the further amended statement of claim. When regard is had to the passage in the argument set out at paragraph [12] above, it becomes clear that it was only the claim at paragraphs 60(c) and 73 which was the subject of the Lord Chief Justice’s informal indication as to amending the pleading. This also makes sense in a substantive way, for there is a basis for the damages claim at paragraph 60(a) and (b) apparent from the pleading, but no proper basis for the claim at paragraph 60(c) is pleaded.
[15] On 5 July 2023, the Lord Chief Justice did not make any formal order to the effect that the appellants were obliged to deliver a new amended pleading which omitted paragraph 73 and the particulars at paragraph 60(c), but that was clearly the intent of the comments he made in his reasons. Counsel for the appellants agreed with this approach at the hearing on 5 July 2023, and an amended pleading, which omitted paragraphs 60(c) and 73, ought to have been filed, even though there was no formal order. The Court must be able to rely upon counsel acting in accordance with an exchange such as occurred in the current case. Counsel’s first duty is to the Court. This duty prevails over Counsel’s duty to their clients. Here the appellants’ counsel should either have acted in accordance with the Court’s indication, or returned to the Court asking that the matter come back on for further argument if difficulties arose with her clients’ instructions to amend the pleading as Whitten LCJ expected her to do^[1].
[16] After the hearing of the application on 5 July 2023 before Whitten LCJ, the appellants did not file an amended statement of claim. Then they filed a supplementary affidavit by Mr Madden (29 August 2023). The respondent understandably saw this as an indication that the appellants were relying upon the damages claim in the unamended pleading. As a consequence, the respondent filed an application to strike out parts of the further amended statement of claim. The application was not limited to paragraphs 60(c) and 73, but was to strike out the entire damages claim made by the appellants, that is to strike out paragraphs 59, 60, 72 and 73 of the further amended statement of claim.
[17] Before considering that application further, we will describe the supplementary report of Mr Madden, which led the respondent to make the strike out application.
[18] Mr Madden’s supplementary report dated 25 August 2023 says that the purpose of his report “is to determine two categories of losses to [the appellants] as a result of continuing delays in [the first appellant] taking possession of the TPL Shed”. The first category is “... losses by continuing to pay a higher rental to their current landlord... rather to their new landlord TPL should their contract have been finalised. This was over a two year period commencing from when [the first appellant] was going to take possession of the TPL Shed in January 2022 to January 2024.” It is plain that this refers to the damages claim pleaded at paragraph 60(a).
[19] The second category is said to be loss of profits “due to the continued delays in the finalisation of the Rent to Buy Agreement, [the first appellant] would incur future losses by not having the opportunity (due to the claimed breach of contract) to rent and purchase the subject property, then redevelop and tenant it at a higher rate due to market demand.” This refers to a future loss of profits, but on a different basis to that pleaded at paragraph 60(c) of the further amended statement of claim.
[20] To calculate the amount of this second, unpleaded, loss of profit claim, Mr Madden makes assumptions which are nowhere stated in his report as to many matters such as the operating costs to the appellants of running a shed rental business, the rents likely to be received from renting the TPL shed, and income tax the appellants might pay over the next18 years. He arrives at a figure of TOP$1.206 million lost profit.

Application Before Tupou ALCJ

[21] The strike-out application made by the respondent on 22 September 2024 was said to be made pursuant to Order 8 Rule 8 of the Supreme Court Rules 2007. Order 8 rule 8 (1) allows the court to strike out a pleading (or part of it) if : (a) it discloses no reasonable cause of action; (b) is scandalous, frivolous or vexatious; (c) is unclear; may otherwise prejudice or delay a fair trial, or (d) is in any other respect an abuse of process. The respondent asserted that the paragraphs it wished to strike out were an abuse of process because, before Whitten LCJ, the appellants had abandoned their claim for damages. The respondent also asserted that the allegations in the paragraphs would delay the trial of the matter because of the complex issues involved in Mr Madden’s evidence. That is, the respondent relied upon O8 r8 (1)(c) and (d).
[22] The application came on before Tupou ALCJ. Tupou ALCJ ordered that all the paragraphs of the further amended statement of claim making damages claims (59, 60, 72 and 73), be struck out on the basis that Whitten LCJ had considered the merits of the claims and indicated that they ought to be removed from the statement of claim. She was of the same view as to the merits of the claims. Further, she criticised the conduct of counsel for the appellant in not amending the pleading in accordance with the informal indication in Whitten LCJ’s reasons. That criticism was justified.

Grounds of Appeal

[23] The first ground of appeal is that Tupou ALCJ erred in concluding that Whitten LCJ had ruled that the appellants had abandoned their damages claim. In part, this ground must succeed. As discussed above, we consider that Whitten LCJ came to the conclusion that there was no basis for the alternative damages claim at paragraphs 60(c) and 73 and, with the consent of counsel for the appellants, determined that those paragraphs should be removed from the further amended statement of claim. We do not consider his informal direction to amend applied to paragraphs 59, 60 (except for (c)) and 72. As discussed above, we reach that conclusion because we have the transcript of the hearing before Whitten LCJ, and can resolve the ambiguity in Whitten LCJ’s reasons for judgment. Tupou ALCJ did not have the transcript of the hearing before Whitten LCJ and it is therefore understandable that she interpreted his reasons as applying to all the damages claims made by the appellants, not just the loss of future profits claim.
[24] Subject to what we say about repleading below, the remainder of ground 1 must fail, as must ground 3. Whether or not counsel gave a formal undertaking to amend the pleading, the discussion between Whitten LCJ and the appellants’ counsel was to the effect that there was no basis for paragraphs 60(c) and 73. This was conceded by the appellants’ counsel. She now says that she had no instructions – that with respect is her problem, counsel is assumed to have authority, and their actions bind the client^[2]. If the appellants’ counsel had no instructions and could not therefore concede the point being put to her by Whitten LCJ, she ought to have said so. In all likelihood that would have led to a formal ruling and order to the same effect as the informal indication given by Whitten on 5 July 2023.
[25] Ground 2 was not pressed.
[26] The fourth ground of appeal was that Tupou ALCJ erred in thinking that Whitten LCJ found that the alternative damages claim had no prospect of success at trial. It was pointed out that there was no evidence as to the merits of the claim before either Whitten LCJ or Tupou ALCJ, and it was asserted that that O8 r8 does not allow evidence on a strike out application. This latter assertion is too broad, see below.
[27] It is true that there was no evidence as to the merits of the alternative damages claim before Tupou ALCJ, and although Whitten LCJ did have Mr Madden’s earlier reports, he was certainly not considering them on something akin to a summary judgment application. However, the submission made by the appellants’ counsel on appeal ignores the point that she conceded there was no prospect of the alternative damages claim succeeding; this was enough for Whitten LCJ to proceed on that basis.
[28] Ground 7 is an associated point concerning O8 r8. On the hearing before Tupou ALCJ the respondent relied on an affidavit putting the relevant procedural history of this proceeding before the Court. This was to demonstrate what the respondent said was an abuse of process having regard to the hearing before Whitten LCJ and his ruling, and the propensity of the pleading to delay a fair trial in the matter. There was nothing irregular about that. It is only if a strike out application is brought in reliance on O 8 r 8(1)(a) that there is to be no evidence – see O 8 r 8(2). O 8 r 8(1)(a) allows the Court to strike out a pleading that does not disclose a reasonable cause of action or defence. Such a flaw will be apparent from the pleading itself, and hence the rule about no evidence on such an application. However, the respondent relied upon O 8 r 8(1)(c) and (d) and it was quite proper for it to put on affidavit material as it did.
[29] Ground 5 of the appeal was that the judge below erred in finding that the damages claim would fail when it was supported by Mr Madden’s report. The judge below did find that the appellants’ damages claim would fail, she said, “In his ruling [of 5 July 2023], [Whitten LCJ] made clear that this part of the claim cannot be pursued as it has no chance of success. I too have made my own assessment and I agree.”
[30] In so far as these comments made by Tupou ALCJ relate to paragraphs 59, 60(a) and (b), and 72 we think they are erroneous. We think there is a pleaded basis for these claims, and the claims themselves seem to be of a logical and unexceptional character. At the trial they will need to be supported by evidence on behalf of the appellants, proving the facts on which they are based, so that the expert opinion of Mr Madden has a foundation in the evidence.
[31] The position regarding the alternative damages claim at paragraphs 60(c) and 73 of the further amended statement of claim is less clear. The pleading at paragraph 60(c) of the further amended statement of claim is unclear and is not a description of the second claim in Mr Madden’s report. The claim pleaded is for lost rental savings for 20 years, that is, it is the same claim as that pleaded in paragraph 60(a) but over a different, and longer, time frame. The second claim in Mr Madden’s supplementary report is based on the appellants renovating the TPL shed and conducting a business of renting it to third parties.
[32] Whitten LCJ’s original point was that if the appellants are granted specific performance, they need not rely on this second loss of profits claim, and if they fail to establish a binding contract, the claim fails. However, as argued on this appeal, there is a third possible alternative, namely that the appellants prove a breach of contract, but for some reason the court is unwilling to make an order for specific performance. There would be utility in the paragraph 60 (c) claim in that circumstance. As specific performance is always a discretionary remedy, granted in the Court’s equitable jurisdiction, this is a factor to be considered in every case where specific performance is sought. These are indications that is a very real consideration in this case where a defence is pleaded of “unclean hands”, and where on the appellants’ case, the TPL shed has been badly damaged since the agreement.
[33] At present paragraph 60 (c) is poorly pleaded. It does not plead the same claim as is made in Mr Madden’s report. Furthermore, Mr Madden’s report assumes numerous facts as the basis for his second claim which are not pleaded. For those reasons the claim as pleaded in paragraphs 60(c) and 73 of the further amended statement of claim should have been struck out as the Judge below ordered. Because we can see some utility in a claim of the sort the appellants are attempting to plead, we consider that the appellants should have an opportunity to seek leave to re-plead on the conditions we discuss below.
[34] It is necessary to say something more about the claims at paragraph 60 (d) and (e) of the further amended statement of claim. First as to 60(d), legal costs are not properly included as an item of damages; they are in the discretion of the court after final orders are made in the proceeding.
[35] Secondly, as to 60(e), we cannot see that it is a viable pleading at present. Let it be assumed that the TPL shed was damaged and that it will cost TOP$300,000 to repair it. A proper pleading should identify the date or dates of the damage, and the legal basis for the claim that it is the legal obligation of the respondent to repair the damage. If the damage occurred after ownership of the TPL shed should have been transferred to the appellants, it is difficult to see that there could be a claim. If the damage occurred during the period of the asserted lease, the provisions of the lease as to repair and insurance will no doubt be relevant. There may be other matters to be pleaded which depend upon facts this Court has no knowledge of.
[36] Finally, we deal with ground 6 of the appeal. This was that the judge below erred in denying the appellants the right to bring a claim in damages as an alternative to their specific performance claim. This is more a complaint about the effect of the orders made by the judge below than an identification of error on her part. We do not think it adds anything to the other grounds of appeal.

Conclusions

[37] The appellants have succeeded in demonstrating an error by the judge below as to paragraphs 59, 60(apart from (c)), and 72 of the further amended statement of claim. As explained, we do not consider that Whitten LCJ was critical of these paragraphs. We do not think they were the subject of his indication about amending the pleading. We consider that the judge below erred in finding that they have no chance of success, and (subject to what we say below about paragraphs 60(d) and (e)) we do not think that they are so poorly pleaded that they should be struck out.
[38] In relation to paragraphs 60(c), and 73 of the further amended statement of claim, we cannot see that it was wrong for the judge below to strike them out. They are not adequately pleaded; that is, the pleading does not disclose a proper factual basis for the claims made.
[39] As explained above, paragraph 60(d) of the further amended statement of claim is irremediably wrong in law, and paragraph 60(e) does not currently plead an adequate basis for claim. For these reasons we would not interfere with the orders below so far as they concern these two paragraphs.

Leave to Replead

[40] As we said at paragraph [33] above, we think the appellants should have a chance to apply to a judge of the Supreme Court for leave to replead the loss of profits claim with which paragraphs 73 and 60 (c) of the further amended statement of claim were concerned, and which is fvthe second claim described in Mr Madden’s supplementary affidavit. We also think they should have a chance to apply for leave to replead the claim at paragraph 60(e). This Court would have granted that leave itself except the appellants have not disclosed the documents which support the assumptions in Mr Madden’s report. It seems to us there will be a great number of such documents going to prove the asserted profits and the financial position of the appellants. As well, there must be documents showing the cost of repairs if leave is to be given to replead the claim at paragraph 60(e). The application for leave to amend must be supported by an affidavit sworn on behalf of the appellants which exhibits the draft second further amended statement of claim, and swears to a complete list of documents of which the appellants will make discovery if leave to amend is granted. It must be filed within 28 days of delivery of this judgment.

Costs

[41] Although the appellants have had some success on this appeal, the difficulties which necessitated the appeal were largely a result of the conduct of the appellants’ counsel before Whitten LCJ. As well, the appellants have not been acting as responsible litigants. They have not made proper discovery and they seek to rely upon a loss of profits claim which is not properly pleaded. We think the appellants should pay the respondent’s costs of this appeal.
[42] We order that:

• (a) The appeal is allowed.
• (b) The order below is set aside.
• (c) Paragraphs 60 (c), (d), (e) and 73 of the further amended statement of claim are struck out.
• (d) The appellants have 28 days from the delivery of this judgment to make an application of the type described at paragraph [40] above, on the conditions set out at paragraph [40] above.
• (e) The appellants are to pay the respondent’s costs of this appeal.
  

______________________

Randerson J

______________________

Heath J

_______________________

Dalton J

---

^[1] Alternatively she might have accepted Whitten LCJ’s informal direction, but applied again to the Court for leave to replead loss of profits claim. A further alternative was to have originally made a cross-application to replead in the event that the pleading, or part of it, was struck out.
^[2] Carrell v Carrell [1975] NZLR 441.