Introduction

[1] The appellant, Pharmacy Care, entered into a Deed of Settlement with the Northern Regional Health Authority (“North Health”), under which Pharmacy Care agreed to pay North Health $80,000. North Health is represented by the respondent in this proceeding.

[2] Subsequently, Pharmacy Care sought to have the Deed set aside on the relatively rare basis of “duress”. The central allegation is that North Health and its legal advisers distinctly over-reached in pursuing a settlement with the appellant, by improperly threatening a criminal proceeding. Pharmacy Care sought to recover this sum of $80,000 from North Health, and certain sums for consequential losses.

[3] The claim was dismissed by Paterson J in a reserved judgment delivered on 19 September 2003 (HC AK CP96/00).

[4] Pharmacy Care now appeals to this Court. The case is not without its difficulties, but in the event we have come to the clear conclusion that the appeal should be dismissed. We agree with Paterson J that duress has not been established. The burden of this judgment is therefore to explain why we have come to that view.

The Pharmacy Care business concept

[5] Mr Aitken is an entrepreneurial pharmacist. He became a Member of the Pharmaceutical Society (MPS) in 1979. He worked principally in Wellington until 1987. He then moved to Sydney, but returned to New Zealand in 1991. Shortly thereafter Mr Aitken formed the appellant company to put into practice a business concept he had developed.

[6] This concept involved the following elements. First, there was a medicine management aspect under which individual patients in institutions such as rest homes and hospitals have their prescribed medicines placed in individualised, weekly “blister packs”. Secondly, the system assisted in the auditing of the storage of medicines. Thirdly, this system replaced the traditional temporal prescriptions (of say, three months duration) in which a prescription would be filled each month and the medicine would be stored in facilities with medicines belonging to other patients, although it would usually be administered by caregivers. Fourthly, this concept aimed at reducing the inefficiencies in the traditional system of prescriptions by “recycling” pharmaceuticals. For instance, a prescription might change in a three-month period and then there would be consequential wastage of medicines which could be reutilised.

[7] The medicines being supplied by Pharmacy Care to institutions in this manner were almost completely funded by mechanisms established by the New Zealand Government.

[8] This business approach sharply differentiated Mr Aitken’s business concept from other pharmacies in New Zealand.

[9] First, his was a “closed door” pharmacy, in the sense that it was not a retail business. It was aimed solely at supplying a service to organisations that were concerned with large numbers of patients. And because it was not a retail business, the appellant did not belong to the Pharmacy Guild, which charges a membership fee based on a percentage of turnover. Mr Aitken saw himself as starting a business based on an untested business concept, and one with low profit margin but high volumes. He did not wish to incur the overhead costs of Guild membership.

[10] Secondly, this business concept was also going to cut across the usual practice of pharmacies in submitting twelve claims per year for 30 days of medicine.

[11] A third significant point of difference was that the Pharmacy Care concept generated prescriptions for doctors to check. This was designed to save the medical profession time, and to ensure that patients would continue to receive their medicine until there was a change in the prescription. This in turn required the evolution of appropriate software. This software was designed to record case histories, handle changes in medicine, deal with complex dose-handling, record patient profiles, scripts and accounts, and to track stock control. The ultimate goal of the software was to create an effective audit tool.

[12] Fourthly, Mr Aitken’s business planning extended to what he foresaw to ultimately be a franchise type operation. He saw the role of Pharmacy Care, long-term, as being restricted to that of business development manager and head franchisor. In fact, in 1994 Pharmacy Care (Manukau) Ltd was set up with another pharmacist; and in 1995 Pharmacy Care (North Shore) Ltd was set up (both as separate companies).

[13] Against that general scheme, it is necessary to say a little more in detail about some of Pharmacy Care’s business practices. We have noted that Pharmacy Care developed a practice of “recycling”. When Pharmacy Care began to supply patients at an institution with blister packs, that institution might deliver to Pharmacy Care its stockpile of medicines that had built up from past changes of patient prescriptions. Mr Aitken maintained that this was not solicited, but Pharmacy Care agreed to accept these unused stockpiles. And after discarding those “returned” medicines which could not be safely dispensed, it in fact dispensed medicines from the stockpiles. What was discarded were medicines past their use-by date; where identity could not be guaranteed; or where storage conditions could have adversely affected quality. Pharmacy Care said it had strict policy in place of, “if in doubt throw it out”. The vast majority of the “recycled” medicines were two drugs called Epilim and Tegretol/Teril. Epilim is an unusual tablet in that the compound attracts water. If opened or exposed to air, the tablets change shape and the tablets could easily therefore be verified for quality. This drug accounted for 80 percent of Pharmacy Care’s dispensing. Tegretol is a tablet which has a coating which makes it very resistant to air, humidity and other adverse storage conditions. Any adverse quality effects would show up in the way of damage or spoiling to the coating, thereby making visual checking straightforward. Verification was always undertaken by qualified pharmacists.

[14] At this point, it is necessary to outline how the relationship with North Health came about and how claims for reimbursement were made by Pharmacy Care.

[15] Pharmacy Care submitted its claims to the Department of Health under the Social Security (Pharmaceutical Benefits) Regulations 1965 until such time as the Health and Disability Services Act 1993 (HDS) came into force on 10 May 1993, and a statute-based contract was set up, effective 1 July 1993.

[16] From that date, Pharmacy Care commenced a purchase contract with North Health. The terms and conditions of this purchase contract are contained in a notice issued by North Health in accordance with s 51 of the Health and Disability Services Act 1993 known as an “Advice Notice to Pharmacy Contractors”. This notice continued in force pursuant to a notice issued by North Health, dated 18 October 1993. We will refer to this as a s 51 notice.

[17] It is convenient to note here that the s 51 notice was functionally a “terms of service” agreement, issued under that section of the Health and Disability Services Act 1993. It set out how prices were to be fixed for North Health’s pharmaceutical requirements, the obligations of contractors, and methods of payment to contractors.

[18] The relevant claims were submitted on claim forms. North Health, or its agent for collecting, processing, and making payments under claims, Health Benefits Limited (“HBL”), made those forms available to Pharmacy Care. The claim forms would have attached to them the prescriptions in respect of the medicines for which claims were being lodged.

[19] The claims actually made by Pharmacy Care comprised the prescribed amount for every medicine dispensed, including recycled medicines and “bonus” medicines that Pharmacy Care had not actually paid for. That is, these claims included some unused medicines supplied to Pharmacy Care from the various patient stockpiles at institutions, and some medicines made available to Pharmacy Care by drug suppliers by way of “bonus” medicines. This later category came about because drug suppliers commonly provide drugs to pharmacists free of charge for promotional reasons, and bonus medicines were not always recorded on invoices from suppliers. In the result, drugs from both these sources were free of charge to Pharmacy Care, but it claimed “reimbursement” on them.

[20] Mr Aitken considered that claiming of this kind was legitimate. He said that his belief was based on his reading of the Social Securities (Pharmaceutical Benefits) Regulations 1965, the s 51 notice, and the claim form/invoice supplied to him for making such claims.

[21] Payments were in fact received by Pharmacy Care for each claim from HBL until March 1996.

[22] Neither central Government nor North Health had any hand in sourcing the relevant pharmacy stock. How a pharmacy got its stock was its business. In Pharmacy Care’s case, apart from the “recycling” practice, this occurred by purchasing on commercial terms from manufacturers. That relationship could also include discounted stock and free or bonus stock.

Mr Aitken’s business concept does not go unnoticed

[23] Pharmacy Care’s operations were relatively novel, compared with other pharmacy operations in New Zealand. Once the nature of the operation was known, its premises were visited by a Field Officer from the Pharmaceutical Society, public health pharmacists, and medical compliance officers, who became interested in the enterprise.

[24] Mr Aitken found these visits beneficial because his system was still evolving. In particular he appears to have had a concern as to whether it was acceptable for his enterprise to use medicine that had been given to Pharmacy Care by institutions and rest homes (one aspect of the “recycling” issue), and as to the appropriate method of submitting claims when there were changes of prescription mid-week. Mr Aitken was also concerned to see that the blister pack system used by Pharmacy Care was acceptable.

[25] One of the other visitors to Pharmacy Care premises was a Mr Monkton, who was on the Board of North Health. In September or October 1993 the Board of North Health itself visited Pharmacy Care’s premises.

North Health elects to audit

[26] In mid-September 1993, a Mr Neil Christie, the Compliance Manager for HBL, and an HBL investigator, visited the Pharmacy Care premises in Ponsonby. Although it is not mentioned by the trial Judge, it seems that relations between Mr Christie and Mr Aitken did not get off to a good start. Mr Aitken attributed this to statements by Mr Christie that Pharmacy Care would never succeed in what it was doing because it would not be permitted to make a go of it by the established pharmacists.

[27] In mid-October 1993 Mr Christie advised Mr Aitken that Pharmacy Care had been selected for an audit because “you are operating in a slightly different manner than our other claimants”. There is no discussion of the difficulties relating to this audit in the judgment under appeal. Mr Aitken’s evidence was that he was “regularly accused” by Mr Christie of committing “fraud”, of “double dipping”, and “over claiming”. Mr Christie said in evidence-in-chief, “I was concerned that what was described as ‘recycling’ - in effect, claiming twice for the same medication - was a fraudulent act, and also whether the practice of re-dispensing previously dispensed medication was ethical, permitted by law and safe.” Undoubtedly, this put Mr Aitken on the defensive and made for somewhat strained relations between these two men.

[28] By December of 1993 the North Health investigations had suggested a variance of approximately $47,000 between the submitted records of inward supplies against Pharmacy Care’s claims for payment from HBL. Mr Aitken acknowledged that these variances came about partly from the system he was using, partly as a result of bonus supplies, and partly on account of returns on recycling drugs where a subsidy had already been paid.

[29] North Health’s investigations continued. By April of 1994 it had sought advice from the Crown Solicitor at Auckland, at which time, in its view, excess amounts claimed had been established in the order of $92,000. North Health also took advice from the Pharmaceutical Society on the issue of the safety of recycling of medicines. The Society’s general policy was that medicines should not be recycled.

[30] In June of 1994 an investigating officer from HBL, and another HBL employee, interviewed Mr Aitken. A week later another of Pharmacy Care’s pharmacists, Mr Linkhorn, was interviewed. These were thorough interviews. A note was taken of them.

[31] On 9 July 1994 Mr Christie sent Mr Aitken a copy of the transcript of the interviews, and repeated his concerns which were (broadly) that he considered there to have been overclaiming of $92,000, and he also had a concern about the proper maintenance of patient records. This was related to the software Mr Aitken was using.

Steps to an agreement

[32] This then was the context in which the agreement which is at the heart of this proceeding began to evolve.

[33] It is common ground that there was a meeting on 5 December 1994 between Mr Aitken, Mr Christie and a Mr Bradley, who was an investigative and business consultant retained by HBL to advise it in relation to Pharmacy Care. The Judge found that Mr Aitken was advised that Pharmacy Care had “over claimed” a sum of $78,000 from North Health in respect of recycled medicines. The Judge noted that there was a conflict of evidence as to whether an agreement was reached at this meeting. The tenor of Mr Aitken’s evidence was that he agreed that if Pharmacy Care did in fact owe North Health money then it would pay $78,000 to settle the claim. Mr Christie and Mr Bradley, on the other hand, said there was actual agreement that Pharmacy Care would pay $78,000, and that Mr Christie wrote out an agreement in his loose-leaf diary, and read it to Mr Aitken, who then initialed it. The diary has since been destroyed. Mr Christie’s evidence was corroborated by Mr Bradley. The probabilities have to be that there was (at least) an embryonic agreement because immediately after this meeting Messrs Bradley and Christie met with a Mr Gedye, the General Manager for pharmacy matters at North Health. A typed agreement was then prepared, but that agreement was never signed.

[34] What happened is that Mr Aitken took legal advice as to this draft written agreement. On the advice of his solicitor, Ms Anderson, he consulted Mr Vickerman, who was then a litigation partner in an Auckland legal firm (but who later joined the independent Bar). Mr Aitken’s evidence was that he (or his company) was only prepared to pay if he was lawfully required to do so on account of unlawful recycling. The Judge found that this was the first time Mr Aitken had put the matter that way.

[35] There was then a meeting on 19 January 1995 between Messrs Aitken, Christie, Bradley, and Vickerman. It is common ground that the upshot of that meeting was that any resolution of the issues which had arisen would be deferred until the legal status of the recycling of medicines was clarified.

[36] There was then a delay of some several months, until September 1995. At that time Mr Christie wrote to Mr Vickerman asking for comment on an analysis carried out by HBL of claims in respect of certain quantities of Epilim. Mr Christie also stated in that letter that HBL would recommend to the Board of North Health that the issues which had arisen would be referred to the Advisory Committee as a “dispute” pursuant to schedule 4, section 11, of the s 51 notice to pharmacy contractors.

[37] In fact, as the Judge noted, no such reference was ever made to the Advisory Committee. It may be that the unfortunate events which were to unfold and which have led to this prolonged litigation, no doubt at considerable expense to the parties, would have been avoided if the dispute resolution mechanism of the Advisory Committee had been resorted to. However, in fairness, before us it was suggested that the role of that Committee may have been more in the nature of a trade committee which was not suited to the determination of legal disputes.

[38] In any event, on 14 December 1994 Mr Vickerman met with Mr Fardell of Russell McVeagh, who had by now been instructed for North Health. Mr Fardell agreed to outline the legal basis of North Health’s complaint about the recycling of medicines.

[39] On 18 January 1996 Mr Fardell wrote to Mr Vickerman. He asserted three grounds upon which the legality of the recycling practice was challenged, namely:

• a breach of an implied term in the s 51 notice;
• a breach of the Fair Trading Act 1986 through an alleged misrepresentation by Pharmacy Care in that, by claiming for the supply, Pharmacy Care was representing that it had paid for the medicines;
• an offence against s 229A of the Crimes Act 1961, namely, use of a document with intent to defraud and gain a pecuniary advantage.

[40] Having raised the legal concerns we have noted, Mr Fardell concluded:

We have left aside for the moment the safety and efficacy issues involved in this “recycling” of pharmaceuticals but do note that this is equally a concern both from a contractual and a statutory perspective.

Considering but one of the drugs discussed, Epilim, we note HBL has previously provided a schedule showing approximately 24-25% recycling of this drug. This has been acknowledged by yourself.

Statements from general practitioners indicate that they contractually rely on Pharmacy Care Systems to monitor drug usage and prepare prescription forms. By not changing the forms to the actual dosage, (which is 75% claimed) pecuniary advantage of $13,723.39 was obtained on this drug alone.

North Health and HBL are very concerned at this practice and will have no option but to take appropriate action if the matter cannot be resolved between the parties.

As discussed we believe it would be sensible to have a meeting with yourself and Mr Aitken to discuss this issues (sic) and possible resolution. If you agree to such a meeting please advise of an appropriate date and time.

We look forward to hearing from you.

[41] Subsequently, in relation to certain February and March 1996 invoices, North Health withheld approximately $19,000 with respect to Pharmacy Care invoices. North Health asserted that it had a right to set off these monies against what it claimed to be the historic “over claiming”.

[42] Mr Aitken said that withholding these payments was “disastrous” for Pharmacy Care. The medicines dispensed by Pharmacy Care were almost without exception completely funded by North Health. Pharmacy Care was therefore heavily reliant upon North Health satisfying Pharmacy Care’s claims on a timely basis to pay the running expenses of its business, and to pay medicine suppliers and manufacturers. Further, by now Mr Aitken was negotiating to sell 50 percent of the Pharmacy Care business to another pharmacist. This was part of his notion that Pharmacy Care would be a development company, and that franchisors would operate day-to-day operations. As a result of the withholding payments he claimed that these arrangements fell through. Further, there was anxiety that at that stage North Health had not yet responded to an application by Mr Aitken for a s 51 notice for the Ponsonby pharmacy.

[43] On 7 March 1996 Mr Fardell faxed a letter to Mr Vickerman indicating that $58,000 had been retained by way of set-off. He added:

We have no difficulty in putting the relevant events within the ambit of several provisions in the Crimes Act, including the theft provisions, the false pretence provisions and s 229A.

[44] Mr Vickerman replied promptly on 8 March 1996. He raised certain legal concerns as to the set off, given the interrelationship between the various companies. He then suggested that the action taken by North Health could only be seen “as a ploy to apply illegitimate pressure on my client”. He said that if the requisite monies were not paid forthwith “the appropriate commercial action for the recovery of an undisputed debt” would be taken.

[45] Mr Fardell replied on 11 March 1996. He said that there were a number of “genuine and serious issues to address”. He suggested a meeting on 28 March to try and effect an “overall resolution”. He said: “Our clients are not into tactical positioning. There is a very real concern about your client’s practices in what seems to be an obvious attempt to arrange their affairs to avoid any ultimate liability with regard to the position of Pharmacy Care Systems Ltd and Mr Aitken.”

[46] Mr Vickerman replied on 13 March 1996. He noted that two years or so had passed with ongoing investigations and that his client had been co-operative. “On the other hand there has been significant delay by your client and its agents in answering my client’s queries.” He said that so long as the withholding of monies was maintained there could not be a meeting, but his client would reconsider that if the payments were made.

[47] On 14 March 1996 Pharmacy Care issued statutory demands under s 218 of the Companies Act 1993 against HBL for the amounts that had withheld.

[48] By now Pharmacy Care was under distinct pressure from its suppliers; from the owners of the various franchise operations; and there was the difficulty that the position of the newly established Ponsonby operation had not been finalised.

The 20 March 1996 meeting

[49] This then was the context which led to a critical meeting between Mr Gedye, for North Health, and Mr Aitken. The meeting was called by Mr Gedye. There were only the two men present.

[50] There was a distinct conflict of evidence as to what occurred at that meeting. The tenor of Mr Aitken’s evidence was that at this meeting Mr Gedye made threats to institute a criminal prosecution, and that he was given a limited time to accept a settlement on the basis that he would pay $80,000. Mr Gedye maintained that he did not at that meeting make threats to institute a criminal prosecution. He said his position was that whilst his institution’s figure for an over claim was about $180,000, it would settle for $80,000 to get this whole matter cleaned up. The Judge appears to have accepted that the issue of Mr Aitken’s s 51 notice (for the Ponsonby pharmacy) was also discussed.

[51] Clearly, a critical credibility finding was going to be required as to what had transpired at this critical meeting. In his judgment the Judge said, without more, “I found Mr Gedye a credible witness and prefer his evidence to that of Mr Aitken.”

[52] There was sharp criticism of the terseness of this holding by Mr O’Callahan, on the footing that it was insufficient, and unfair, particularly given the central importance of the finding to his client’s case. We therefore need to deal with this point in some depth.

[53] A bare finding of credibility of this kind may be insufficient in particular cases. For instance, in Heffer v. Tiffin Green (UK, The Times, 28 December 1998) the plaintiff had sued the defendant accountants for negligently understating their business profits by inflating the figure for creditors. As a result, further tax had to be paid. The plaintiffs claimed the penalties and interest on tax paid exacted by the Inland Revenue Department. The issue before the Court in the first instance was straightforward: did Mr Heffer know about, or was he ignorant of, the overstatement of creditors? In the Court of Appeal, Henry LJ noted that whilst Mr Heffer had obviously been an attractive and persuasive witness, “it was crucial to test his evidence against the objective facts, the contemporaneous documents, the motives of those involved, or the lack of them, and the overall probability.” The trial Judge had not done this. The Court of Appeal said, “there was no proper reasoned reappraisal of the Judge’s initial view of credibility against the commercial probabilities, and no proper examination of the issues raised by the contemporary documents”. The documents had been looked at, but they had not been given a consideration which was “proper, detailed, and dispassionate.”

[54] The English Court of Appeal revisited these issues in Kapur v. J W Francis and Co (QBENF 98/1186/1; 18 May 1999). Notwithstanding a finding by a High Court Judge that Mr Kapur “had shaded the truth”, and “lacked frankness in his evidence”, that Court set aside a credibility finding on the basis that not only was there a lack of reasoning as to why the Judge preferred Mr Kapur’s evidence, but that in that case no such finding could appropriately have been made.

[55] In Flannery v. Halifax Estate Agencies [2000] 1 All ER 373 the English Court of Appeal also said:

[If] there is a straightforward factual dispute whose resolution depends simply on which witness is telling the truth about events which he claims to recall, it is likely to be enough for the judge (having, no doubt, summarised the evidence) to indicate that he simply believes X rather than Y; indeed there may be nothing else to say. But where the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other. This is likely to apply particularly in litigation where as here there is disputed expert evidence; but it is not necessarily limited to such cases (at 378).

[56] In State Rail Authority of New South Wales v. Earthline Constructions Ltd (1999) 160 ALR 588 (HCA) it was held that:

In evaluating the evidence of the SRA’s principal witness, the trial judge was heavily swayed by his impression of her while giving oral evidence. However, this circumstance does not preclude a court of appeal from concluding that, in the light of other evidence, a primary judge had too fragile a base to support a finding that a witness was unreliable. The documentary evidence provided significant support to the allegations made by the principal witness. These were matters to which weight was not given either by the trial judge or by the Court of Appeal (Headnote).

[57] In this case, we have to say that the Judge’s finding was not sufficiently elaborated upon. Because of the importance of the issue in this particular case, we have reviewed the entire record. Having done that, in light of the record, we take the view that it cannot be shown that the Judge was wrong in the assessment which he made in this case. There were instances in the record in which Mr Aitken was less frank than he ought to have been. The summary judgment application (which we discuss more fully later in the judgment) without mention of the Deed of Settlement is the most obvious point of concern here. And Mr Aitken’s version of events did not always square with how he acted. This can be graphically seen from the way Mr Aitken acted after this critical meeting, which events we will also canvass fully later in this judgment.

[58] But before we turn to those events, it is important to note that it was Mr Aitken’s claim that Mr Gedye told him that he had one hour to go away and think about the $80,000 proposition, and that if he did not agree, North Health would commence criminal fraud proceedings against him and make sure that he didn’t get another s 51 notice. Mr Aitken also claimed that Mr Gedye said that “if he had anything to do with it I would never own a pharmacy again”.

The post meeting events

[59] What happened next, is that immediately after this meeting Mr Aitken endeavoured to telephone Mr Vickerman. He was unable to contact him at that time. Mr Aitken claimed that his mind set at this stage was that he was concerned that he could be prosecuted for fraud and could possibly go to jail; that he could lose his s 51 notice, which would imperil his livelihood; and he maintained “I had no doubts that Mr Gedye could ensure that I would never own another pharmacy again. I believed that my career was at risk”. He said he believed he had no choice but to agree to Mr Gedye’s deal. He therefore telephoned him, and told him that he would agree to pay $80,000. However, he could not afford to have monies withheld. Cash was needed for continuing trading. Mr Aitken said that it was therefore agreed that North Health would keep paying Pharmacy Care, but the $80,000 would be paid over a period of time.

[60] Later that very day Mr Aitken again telephoned Mr Vickerman. His barrister carefully took a hand-written note of what Mr Aitken then told him. We regard this communication by Mr Aitken to Mr Vickerman as being of very distinct significance. We set it out hereafter in full (this is Mr Vickerman writing down what Mr Aitken said to him):

20/3

- Spent 1 hr with Geddes (sic) who says we’ve recycled $180,000 of medication, says pay ½

- What’s past is past if we do this

- Will organise guidelines and quality control

- Will take payment over 3 years interest free

- With security say caveatable interest in house

- Will issue a statement saying resolved

- Will give all rest-homes own budget and we’re only people w[ith] software that can deal w[ith] this, ditto hospitals

- And will work w[ith] us to squeeze prices from suppliers.

[61] It will be at once noted that the tenor of the note taken by Mr Vickerman is quite at variance with the account given by Mr Aitken in his evidence. In particular, there is no reference to any question of a possible prosecution. Mr Aitken was firmly cross-examined on this point. He acknowledged that Mr Vickerman was “no wimp” as a barrister, and had got “stuck into” the other side (as could be seen by the issuance of the s 218 notice) and in some of the correspondence. Mr Aitken was then asked:

Q. So, why didn’t you tell him about the threat of prosecution?

A. I was trying to put a brave face on a bad situation at the time. Mark Vickerman’s personality is such that you don’t turn around and go wimping to him.

And further,

Q. The most logical thing for you to do if that [the threat of prosecution] had been the case was to tell Mark Vickerman immediately?

A. Not so.

Q. Why not?

A. Because it was after the fact, I was trying to put a brave face and try to come to terms with the reality of the situation.

[62] It strikes us as highly unlikely that, if he had been threatened in the suggested manner by Mr Gedye, Mr Aitken would not have made some disclosure to his counsel. Nor subsequently was there a protest from Mr Aitken to his barrister that he had been overborne. This is strongly supportive of the credibility of Mr Geyde, whose evidence the Judge accepted over that of Mr Aitken. Further, and this is a point we will turn to later in this judgment, the whole tenor of the note taken by Mr Vickerman is one of a resolution of the matters which had arisen between the parties having been arrived at. Matters thereafter advanced steadily towards the drafting and execution of a formal Deed of Settlement, which again tells strongly against Mr Aitken’s account.

The Deed of Settlement

[63] Russell McVeagh drafted a Deed of Settlement. It was sent to Mr Vickerman on 28 March 1996. This document called for payment of the agreed sum in 72 instalments of $1,111.11 over a period of three years, to be secured by a debenture over Pharmacy Care, or secured against a suitable residential property.

[64] There was then correspondence and negotiation between Mr Vickerman and Russell McVeagh with an unregistered mortgage being offered, along with personal guarantees from Mr Aitken and a Mr Bowen. The Judge found that a proposal by Mr Aitken to give security over a house jointly owned by himself and his brother did not eventuate. His brother was not agreeable. Eventually, Mr Bowen offered to give security over a beach house he and his wife owned.

[65] North Health’s solicitors forwarded a revised copy of the settlement deed on 6 June 1996 providing for annual payments of $20,000 each.

[66] In the meantime, in April, May and early June 1996 further payments were withheld by North Health from Pharmacy Care, totalling $133,734.62. By 19 June 1996 however, the balance over and above the $80,000 had been returned. A further $60,000 was to have been credited to Pharmacy Care, but this had to be reversed pending authorisation and execution of the settlement deed by North Health’s interests on 6 September 1996.

[67] Mr Aitken’s solicitor, Ms Anderson, recorded in a letter to Mr Bowen (whose property was that affected by the caveat) that the Pharmacy Care documents “will be exchanged for a withdrawal of caveat, which has been lodged against your property”.

[68] On 30 August 1996, HBL paid the sum of $23,627.73 into Pharmacy Care’s bank account; the caveat over Mr Bowen’s beach house was subsequently withdrawn; and other sums due to Pharmacy Care were also paid, in due course.

[69] The Deed of Settlement, as executed, recites, inter alia:

Certain issues have arisen between the parties to this Deed concerning the validity and legality of claims made for payment of medicines dispensed by Pharmacy Care, where those medicines dispensed have been returned to Pharmacy Care.

...

The parties to this Deed have agreed to settle the dispute between them. All parties to this Deed have agreed to be bound by the terms set out in this Deed recording settlement of the dispute.

[70] In summary, the Deed provided that North Health would apply the $80,000 which it had retained to meet its claim for over claiming. The Deed also contemplated an ongoing business relationship, in that Pharmacy Care and Mr Aitken agreed to allow Pharmacy Care’s business software systems to be audited from time to time by North Health. Pharmacy Care withdrew its statutory notices. Curiously, nothing was said about the caveat.

[71] Mr Aitken told the Judge, in response to some questions from the Bench, that when he executed the Deed he remarked to his solicitor something to the effect that “there will be another round” or “this wasn’t the end of it”. This appears to have been confirmed by his solicitor (Ms Anderson), who took a file note that “[the] agreement will be challenged at the end of the day”.

The proceeding

[72] In fact, it was not until some three and a half years had passed that proceedings were issued by Pharmacy Care.

[73] When it did, eventually, commence the proceeding which is now on appeal to this Court, Pharmacy Care claimed that the Deed of Settlement was entered into under duress; that the Deed should be set aside; and that it is entitled to recover the $80,000 retained by North Health; $200,000 for the losses allegedly caused by the forced sale of its business; and $50,000 for exemplary damages. The claim for $50,000 exemplary damages was not pursued.

[74] The pleading was that the settlement deed was executed “in late August 1996 … under duress” arising from one or more of the following, either individually or in combination:

A threat of criminal prosecution made by Mr Gedye at the meeting on 20 March 1996;

A threat made by Mr Gedye at the same meeting that Mr Aitken or any company associated with him would never get another s 51 notice;

North Health’s action in withholding funds from Pharmacy Care without a recommendation from the Advisory Committee and contrary to the s 51 notice;

North Health withholding further funds from Pharmacy Care “from time to time in excess of the amount it honestly believed to be claimable”;

North Health (through Mr Christie) advising in August 1996 that unless the Deed of Settlement was executed residual funds would be retained;

The action of North Health in “not releasing” a caveat of the title of the beach property owned by Mr Bowen, who was a director of Pharmacy Care.

The judgment in the High Court

[75] The substantial part of the Judge’s reasons in this case consisted of factual findings. In summary, the Judge found that on 20 March 1996 Mr Gedye did not make threats to institute a criminal prosecution. Mr Aitken “was aware of HBL’s concern that there may have been criminal conduct but no threats to prosecute were made”.

[76] The Judge found that Mr Gedye did not threaten to cancel Mr Aitken’s s 51 notice but Mr Aitken knew there was a possibility of that occurrence if the matter were referred to the Advisory Committee.

[77] As to the setting off of funds, the Judge was of the view that North Health had “a common law right of set off” and in any event it had a legitimate concern as a body charged “with the responsibility of dispensing Government funds” that a pharmacist may well have been “getting the benefit of public funding without meeting the normal expenditure to get it.” The Judge found the subsequent set offs to be essentially a continuation of the general set off dispute. This was in a context in which HBL was still completing its investigations and it honestly believed that satisfactory arrangements had not been made regarding settlement of the earlier dispute.

[78] The Judge accepted that the caveat should not have been lodged. He described this “early lodgement” as being “a case of North Health’s solicitors being too efficient”. He said, “they wrongly anticipated that North Health would sign the proposed Deed of Settlement”. When that did not happen there was some uncertainty as to the position because the ground had moved somewhat, as between the solicitors. The Judge considered this to be “only a minor matter which was always going to be resolved and had no great significance in the execution of the Deed”.

[79] In the High Court, as he did before us, Mr O’Callahan relied heavily upon statements in Barton v. Armstrong [1976] AC 104 (PC NSW) that the conduct in question need only be “a” reason why the Deed was entered into for it to compel the will of the victim, and that the onus then “shifted” to North Health to displace any pressure on Mr Aitken.

[80] Mr Aitken’s case was that the threats compelled him to sign the Deed of Settlement, that at the particular time he received no legal advice as to whether or not he should enter into it, that he was in an impossible financial situation, and that he had no money to resist North Health.

[81] For the Attorney-General, Mr Burns argued that Mr Aitken did have ongoing legal counsel; he had a full range of legal remedies available to him, and indeed he exercised one of them by issuing a statutory demand; and that any real protest to North Health about duress was not advanced until some years after the Deed was signed.

[82] The Judge considered such pressures as there were at the relevant time did not “compel Mr Aitken’s mind to the extent that they vitiated consent” and, “this was not a position where there was no practical choice but to submit to the request”.

[83] As to the “legality” of the recycling process, although it was not necessary to do so in light of his factual findings, Paterson J expressed a view that Pharmacy Care “was to a considerable degree, obtaining Government funds on the implied basis that it had purchased the pharmaceuticals for which it was claiming subsidies. In some cases, I believe it likely that it was claiming twice for the same pharmaceuticals … in these circumstances, I am of the view that North Health was contractually entitled to recover from Pharmacy Care any over claiming.”

[84] In relation to relief, the Judge indicated, in short form, that he did not accept that the claim for $200,000 damages could have succeeded. He said:

There was no credible evidence upon which a Court could have calculated damages. Pharmacy Care had made an independent decision to sell the business, and in the absence of evidence of its true value, damages could not be assessed. The evidence suggested that despite over claiming, the business was not overly profitable.

The grounds of appeal

[85] Mr O’Callahan summarised the basis of the appeal as follows:

A. Recycling was lawful as the terms of the contract required the respondent to pay the appellant for the pharmaceuticals dispensed, regardless of how much the appellant paid for them. There is no basis for implying a term that they had to be purchased and the learned judge did not consider or apply the conventional test for whether a tem (sic) ought to be implied.

B. The coercion element of duress is simply that the illegitimate pressure was “a” reason for entering the agreement (Barton v. Armstrong).

C. Whether pressure is illegitimate is an objective test concerning the reasonableness of the pressure and its natural coerciveness in the circumstances and having regard to the peculiarities of the parties.

D. There was illegitimate pressure in one or more of the following ways:

a. It is plain that blackmail occurred, at least unwittingly. The words Mr Gedye accepts he used would plainly and reasonably have left Mr Aitken with the impression that if he did not settle he would be prosecuted. Alternatively, the threat was already present by implication from earlier correspondence or alternatively, the learned judge was wrong in finding there was no express threat on 20 March 1996.

b. Withholding money in the circumstances was unlawful and naturally coercive, because of the economic pressure and the inherent pressure of the RHA, being a public authority. It was unlawful in that the monies were not due and owing and in any event they could only be deducted from current claims by virtue of a recommendation fro (sic) the Advisory Committee, and there was no such recommendation.

c. Threats to cancel the s 51 notice were made together with threats to ensure that Mr Aitken never got another one. In finding to the contrary the judge ignored Mr Gedye’s own evidence to this effect. The threats were unlawful because cancellation was only possible after a recommendation from the Advisory Committee. Furthermore, a pharmacist was entitled to a contract under s 51 in the future and it was unlawful to threaten not to recognise that situation. In the circumstances this unlawful conduct was inherently coercive and accordingly illegitimate.

d. The RHA used the caveat as a bargaining tool. The learned judge failed to recognise that point and did not analyse the correspondence. It was unlawful to maintain the caveat and was in the circumstances naturally coercive and therefore illegitimate.

E. The onus was on the respondent to show that none of these pressures were acting on the appellant or its officers when the deed was signed in August 1996. The respondent has failed to discharge that onus and accordingly the deed ought to be set aside.

F. The claim for damages for loss of the business is conservative and based on admissible evidence which was not challenged by the respondent at trial except as to causation. On causation, the challenge was ineffectual and the claim should stand for $200,000 plus interest and costs.

The argument for North Health

[86] Mr Burns submitted that the case was disposed of by the factual findings of the Judge, and that it had not been shown he was wrong in those findings. He supported the judgment under appeal.

The law relating to duress

[87] It is important to recognise at the outset that New Zealand courts supervise agreements against “unfairness” by placing limits on their enforceability to only a limited extent. They do so, broadly, under three heads: substance, status, and behaviour. Substantive unfairness rarely comes into play (there must, for instance, be consideration, but the adequacy of the consideration will not be enquired into). Status (or “incapacity”) may come into play from a supervisory point of view, as for instance in the case of minority of a party. Considerations of “behaviour” focus on how the parties acted during the bargaining process. The classic examples in this category are the rules that allow a party to avoid a contract on the ground that that party has been induced to make it by misrepresentation or duress.

[88] At common law, the concept of duress was a very narrow one. It was restricted to actual or threatened physical violence to, or some unlawful constraint upon, the person of the contracting party. According to Lord Coke, the victim might avoid a contract:

(1) for fear of loss with a need of life, (2) of loss with a need of member, (3) of mayhem, and (4) of imprisonment; otherwise it is for fear of battery, which might be very light, or for burning of his houses, or taking away, or destroying of his goods or the like, for there he may have satisfaction in damages (Second Institute 482-483 (1642)).

[89] This view of matters quite failed to give due weight to the coercive effect of other kinds of illegitimate threats. The modern view is that the question is no longer anchored to what was threatened, but whether the effect of whatever was threatened was to bring about a “coercion of the will, which vitiates consent” (Pao On v. Lau Yiu Long [1980] AC 614 at 636) (PC Hong Kong). This decision was expressly followed by Tipping J in Shivas v. Bank of New Zealand [1990] 2 NZLR 327 (“The party seeking to avoid the contract must show that his will has been overborne by illegitimate commercial pressure” at 345).

[90] It is not necessary to show that duress was the sole cause inducing the agreement. It is enough if it was “an” inducement of the requisite character. Moreover, once the fact of duress of some kind is established, the burden is on the party resisting the claim of duress to show that it did not in fact induce the contract (See Barton v. Armstrong, para [75]).

[91] As to what may found a claim of “duress” Professor Dawson was warned that, “the history of generalisation in this field offers no great encouragement for those who seek to summarise the results in a single formula” (“Economic Duress - an Essay in Perspective” (1947) 45 Mich L Rev 253 at 289). Nevertheless, generally speaking, to be capable of giving rise to duress the particular threat will be illegitimate because what is threatened is in and of itself a legal wrong, or because the threat is wrongful, or because it is contrary to public policy. As Treitel puts it, “Whether the threat actually gives rise to duress must then be considered by reference to its coercive effect in each case: no particular type of threat is regarded either as ipso facto having such an effect, or as being incapable, as a matter of law, of producing it” (Contract, 9th ed at 375).

[92] However, as the reach of “duress” has broadened, so as to encompass economic duress and, in a sense, business compulsion, the danger of courts inappropriately conflating impropriety and generalised “unfairness” may become a concern. This lead the drafters of the American Restatement Second (Contract) to suggest that a distinction might be drawn between those things which are in themselves “so shocking” that courts will not enquire into the unfairness of the resultant exchange, and, on the other hand, improper threats combined with resultant unfairness (see paras 186 and 318).

[93] It may be useful to expand a little further on these fundamental principles. Although cases arising out of threats relating to alleged crimes only rarely reach courts today, it follows that the doctrine of duress has expanded well beyond its early confines, and that a threat may be improper even though the person making it has a legal right to do the threatened act.

[94] It is still useful however, for analytic purposes, to distinguish between threats of criminal prosecution and threats of civil process. A threat to instigate a criminal prosecution has generally been regarded as an improper means of inducing a party to make an agreement. There are some common law courts which have held that the resulting agreement is against public policy. The result then is that neither party can recover on it, or obtain restitution. This was the view taken by no less than Justice Cardozo in a famous North American case, Union Exchange National Bank v. Joseph, 131 NE 915 (1921) (“There is to be no traffic in the privilege of invoking the public justice of the state”). On that view, such a threat “is improper even if the person who makes it honestly believes that the one whose prosecution is threatened is guilty, and even if that person is in fact guilty”. (Farnsworth Contracts (1982) at 260.)

[95] The threat to resort to civil process also poses difficult problems. On the one hand, the importance of free access to the judicial system suggests that characterising such threats as improper would be inappropriate. However there are some circumstances in which a threat might be regarded as improper - for instance if the demand was exorbitant. Professor Dawson, supra, has collected North American cases in which such civil threats have been held to be duress if defence of the threatened action is not a reasonable alternative.

[96] This leads to an element which does appears not to have received distinct emphasis in the British Commonwealth authorities: just how grave does a threat have to be to justify the victim in succumbing? Blackstone appears to have thought that what was required was an objective requirement - that the threat be sufficient to overcome the will of “a person of ordinary firmness” (Blackstone, Commentaries on the Law of England 131 (1765), relying on 2 Bracton, On the Law and Customs of England at 65 (“nor is it the fear of the weak and timid but such as may occur in a resolute man”)). An alternative test would be a subjective standard under which the threat need only have deprived the particular victim of his free will. The modern formulation appears to address this issue by a hybrid formulation: the threat must have left the particular victim “no reasonable alternative”. This reflects Patrick Atiyah’s suggestion that duress is ultimately concerned with “the permissible limits of coercion in our society”, and “the extent to which society can legitimately require people to stand up to threats when they are made, rather than to submit and litigate afterwards” (“Duress and the Overborne Will Again” (1983) 99 L.Q.R. 353 at 356; and see Universe Tankships Inc. of Monrovia v. International Transport Workers Federation [1983] 1 AC 366). Whether there was a reasonable alternative will then depend on all the relevant circumstances, including the characteristics of the victim, the relation of the parties, and the availability of professional advice to the victim.

[97] Duress, if established, renders an agreement voidable. It follows that, if duress is to be asserted, it may be lost by affirmation (The Atlantic Baron [1979] Q.B. 705 and Haines v. Carter [2001] 2 NZLR 167 (CA)).

[98] In summary, the elements of duress in New Zealand law today are these: First, there must be a threat or pressure. Secondly, that threat or pressure must be improper. Thirdly, the victim’s will must have been overborne by the improper pressure so that his or her free will and judgment have been displaced. Fourthly, the threat or pressure must actually induce the victim’s manifestation of assent. Fifthly, the threat or pressure must be sufficiently grave to justify the assent from the victim, in the sense that it left the victim no reasonable alternative. Sixthly, duress renders the resulting agreement voidable at the instance of the victim. This may be addressed either by raising duress as a defence to an action, or affirmatively, by applying timeously to a court for avoidance of the agreement. Seventhly, the victim may be precluded from avoiding the agreement by affirmation.

The resolution of this case

[99] We begin with some general observations which we think need to be borne in mind with respect to the whole context of this litigation.

[100] Mr Aitken developed some business concepts in relation to pharmacies which were apparently novel to New Zealand. For whatever reason (he said because he did not want to disclose the business ideas), but perhaps unwisely, he simply went ahead and put his plans into operation. Once the fullness of his operations became apparent, common sense suggests that North Health was inevitably going to take a close interest in what Pharmacy Care was doing, especially given that a public agency was paying twice for the same medicines. The legality of several aspects of the enterprise Pharmacy Care was conducting was a dispute waiting to happen. Questions were bound to be, and were, raised about just how lawful the operation was, as well as how safe it was, particularly given the recycling aspect of the operation.

[101] That said, unlike the Judge, we do not find it necessary or appropriate to enter into the dispute (which inevitably coloured relations between the parties) as to the lawfulness of the various aspects of Mr Aitken’s enterprise. The matters raised under that head are issues of some little difficulty which would have fully occupied a law suit in its own right. The resolution of the matters arising was not assisted by the bullying tactics adopted by North Health’s legal advisors. However, at the end of the day, in our view what occurred in this case was that the parties compromised a lis - a genuine dispute - which had arisen between them, by the Deed of Settlement. Indeed, they contemplated that thereafter relations between them would continue. That they did not do so was due to Pharmacy Care disposing of its interests.

[102] We also observe that North Health did have important obligations of a quasi-regulatory character, and it would plainly have been remiss if it did not closely, and firmly, enquire into the character and detail of Pharmacy Care’s enterprise. Mr O’Callahan accepted that general proposition.

[103] Against these observations, we now turn to the particular matters complained of.

[104] The question of improper threats of criminal prosecution if a Deed was not entered into is conclusively disposed of once Paterson J’s factual finding is upheld. Mr O’Callahan did not complain that the early exchange of views between counsel, which we have recited in some detail, was improper. He accepted - we think correctly - that it has to be the case that there could be an exchange, and even a vigorous exchange, as to the legality of what Pharmacy Care was doing, even to the extent that there might have been a suggestion of an infringement of some provisions of the Crimes Act 1961. Nevertheless, it was going too far, in our view, to say in the letter of 18 January 1996 that North Health would have no option but to take appropriate action if the matter was not resolved, having earlier contended in the same letter that a criminal offence had been committed. Mr Vickerman, however, was not influenced by this overbearing approach and we are satisfied that it had no causative effect on Mr Aitken.

[105] The allegation that mattered was the specific allegation that at the meeting of 20 March 1996 a direct threat as to criminality was made which induced Mr Aitken to enter into the Deed of Settlement. If there was no threat such as is alleged to have occurred at that meeting then there could be no inducement on that score. We are not persuaded the Judge was wrong in his findings in that respect. That aspect of the claim therefore fails, on the facts.

[106] Much the same difficulty is confronted by the appellant in relation to the s 51 notice. Undoubtedly Mr Aitken had a very real concern that his enterprise was dependent on the continuation of the s 51 notice, and certainly that topic had been raised. But again the critical point is the meeting of 20 March 1996 and what was said at that time. The Judge accepted that there was some discussion on this issue. The Judge’s finding was: “I accept that the message was conveyed that if the matter were not settled the ultimate reality may have been withdrawal of the s 51 notice which was an outcome contemplated by the provision of the Act”. However as the Judge rightly observed, Mr Gedye did not have power to cancel the s 51 notice. And the Judge specifically found that he did not accept “Mr Aitken’s evidence that Mr Gedye gave him one hour to respond”. We are not persuaded that the Judge was wrong, as to the evidence, on this point.

[107] The next subset is the withholding of funds. The actual pleading is that North Health withheld funds from Pharmacy Care “from time to time in excess of the amount it honestly believed to be claimable”. The Judge took the view that the rights to withhold derived either from the s 51 notice or through a common law right of set off. North Health and HBL steadfastly believed Pharmacy Care was not entitled to claim for recycled medicine; and that Pharmacy Care was getting the benefit of public funding without meeting the usual expenditure to get it. Contrary to the pleading, patently North Health and HBL believed that it was lawful and appropriate to withhold these funds. It had been so advised by its solicitors. In regular civil proceedings this action would have been unremarkable, and ultimately determined (if necessary) in the course of such civil proceedings. In short, it is very difficult to convert the matters attendant on a genuine dispute into duress.

[108] The monetary difficulties which Pharmacy Care found itself in derived from the circumstances in which Mr Aitken had placed himself. He was endeavouring to juggle his business interests and private interests, and by the middle of 1996 he was already (to the knowledge of North Health) intending to exit his pharmacy business, although he would still have had an indirect involvement as a franchisor. There was some interruption to the cash flow to Pharmacy Care, and these were serious interruptions, but they came about because Pharmacy Care had arranged its business in a way which raised serious accounting issues. In short, the pressures that this placed on Pharmacy Care were in large part self-induced.

[109] The fourth head of concern was the maintenance of the caveat. To recap, the Judge found that the presence of a caveat on Mr Bowen’s property had “no great significance in the execution of the Deed” and that it did not “bring pressure to bear on Pharmacy Care to execute the final Deed of Settlement”.

[110] The background is that on 5 August 1996 the Bowen family solicitors wrote to Russell McVeagh asking for an explanation as to the caveat, and demanding an immediate release as the then projected arrangements were not proceeding. On 8 August 1996, Mr Christie quite properly recommended that Russell McVeagh remove the caveat and return the unregistered mortgage on the Bowen property. Mr Fardell thereupon communicated with the Bowens’ solicitors in Rotorua. He indicated that the position was confused, as Ms Anderson had “indicated that the deal involving the Bowen security may still be available, although that was not our understanding”. Mr Fardell said, “Until we know exactly what the position is we cannot respond unequivocally to your request. We have indicated that North Health’s preference is simply to retain the $80K currently withheld and call the matter a day.” Mr Fardell indicated that he was getting in touch with Ms Anderson. It was in response to that fax that Ms Anderson made a file note that Mr Aitken considered the agreement to repay $80,000 was forced upon him and “that agreement will be challenged at the end of the day”. Significantly, Ms Anderson also noted, “Can’t hold off without [the payments due] being made - can’t settle deals”. This was a reference to certain other property transactions in which Mr Aitken was involved.

[111] The caveat was undoubtedly unlawfully on the Bowens’ title as at the date the Deed was executed, and it was not removed until late October 1996 after further prompting by Ms Anderson consequent upon a sale of the relevant property. But in our view, it has not been shown that the Judge was wrong in his view in relation to the caveat. It was wrongfully lodged and wrongfully maintained for a time, and in that sense it was illegitimate. But the Judge held, as he was entitled to hold, that Mr Aitken over-exaggerated the effect of the caveat. The Judge’s finding that this was “only a minor matter which was always going to be resolved and had no great significance in the execution of the Deed” has not been displaced.

Failure to take steps to avoid the Deed

[112] For the reasons we have indicated, we are not persuaded that Paterson J was wrong, on the facts of this matter. However, even if, for the purposes of argument, duress had been established in our view the appeal must fail because there were no timeous steps taken by Pharmacy Care to avoid the Deed. In our view, it thereby affirmed it.

[113] Some short further facts are necessary. Mr Aitken acknowledged in the course of evidence that, by November 1996, he had lost his concern about being prosecuted after the Deed of Settlement was signed. That Mr Aitken no longer had any concern on that score is borne out by the fact that in December 1996 he said he corresponded with the Ombudsman about this matter.

[114] It was not until some three and a half years later (in March 2000), and without reference to the Deed of Settlement, that Pharmacy Care issued summary judgment proceedings against North Health. Somewhat unsurprisingly, the Deed was raised as a defence. That ultimately led to the present proceedings. In our view it must be wrong, as a matter of principle, for a party seeking to disaffirm a Deed to wait that period of time when no good and sufficient cause has been shown (and perhaps even if it has, after that period of time) to endeavour to have the Deed set aside. The reason for this is that once a Deed of Settlement is entered into, the parties go about their business in the belief that the Deed can be relied upon and the parties will act in reliance on it, as they did here.

Relief

[115] Given the absence of liability, we content ourselves with saying that, on a preliminary view, we share Paterson J’s misgivings as to much of the basis of the claim for damages. We see no useful purpose in pursuing this issue further in this Court.

Conclusion

[116] The appeal is dismissed.

[117] The respondent will have costs of $10,000 together with its reasonable disbursements. Those disbursements are to include the travel and accommodation costs of counsel for the defendant. In the event the parties are unable to agree on the disbursements, same are to be fixed by the Registrar.

Solicitors:
Carter & Partners, Auckland for Appellant
Meredith Connell, Auckland for Respondent