Allnutt v Silverdale Developments (2007) Limited (in liquidation) - [2012] NZHC 3084

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-004983 [2012] NZHC 3084

BETWEEN ROYDEN BRETT ALLNUTT, DIANE PATRICIA ALLNUTT AND JANENE MARY OLSON
First Plaintiff

ANDGARY HUGH CHAMBERS, DENISE CATHY CHAMBERS AND DAVENPORTS HARBOUR TRUSTEE (2008) LIMITED
Second Plaintiff

ANDTHE IMPORTER BRASSWARE LIMITED
Third Plaintiff

Hearing: 11 October 2012

Appearances: G P Blanchard for first defendant
J D Turner for second third party
A R Gilchrist for fourth third party

Judgment: 20 November 2012

JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 20 November 2012 at 1pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:
C Parker, Parker Rhodes, P O Box 47555, Ponsonby, Auckland, 1144
J Turner, McVeagh Fleming, PO Box 4099, Auckland 1140
Vlatkovich & McGowan, PO Box 120, Whangaparaoa 0943

Counsel:
G P Blanchard, PO Box 1235, Shortland Street, Auckland 1140
A Gilchrist, PO Box 5444, Wellesley Street, Auckland 1141

ALLNUTT & ORS V SILVERDALE DEVELOPMENTS (2007) LTD (IN LIQ) & ORS HC AK CIV-2011-404-
004983 [20 November 2012]

AND BODY CORPORATE 411035
Fourth Plaintiff

ANDSILVERDALE DEVELOPMENTS (2007) LIMITED (In Liquidation)
First Defendant

ANDANTHONY BUNTING Second Defendant

ANDGARY RAYMOND COOPER Third Defendant

ANDBARFOOT & THOMPSON Fourth Defendant

ANDOMAHA INVESTMENTS NO.1 LIMITED Fifth Defendant

ANDROBERT JAMES FOSTER Sixth Defendant

ANDHFC: CIVIL AND STRUCTURAL (NORTH) LIMITED
Seventh Defendant

ANDRILEY CONSULTANTS LIMITED First Third Party

ANDATLAS CONCRETE LIMITED Second Third Party

ANDWEST END CONTRACTORS LIMITED Third Third Party

ANDNORTHERN CONCRETE CUTTERS LIMITED
Fourth Third Party

[1] This proceeding concerns commercial warehouse premises at 18 David McCathie Place, Silverdale. The owners of four separate units in that building contend that it was constructed with defects, including defective concrete floors. They have sued (amongst others) the development company, its directors and shareholders, and engineers associated with the design and construction for compensatory damages for the alleged defects.

[2] The development company, Silverdale Developments (2007) Limited (SD2007), is now in liquidation. It was put into liquidation by a resolution of its shareholders. Apart from the claims in this proceeding, it is solvent. It is defending the claim, and has also issued cross-claims against the engineers and third party claims against all persons who had any part in the allegedly defective work. These include the second third party, Atlas Concrete Ltd (Atlas), which supplied the concrete used in the floor slabs, and the fourth third party, Northern Concrete Cutters Ltd (NCC), which was engaged to cut expansion joints in the floors.

[3] Atlas and NCC have applied for an order that SD2007 provide security for their costs. The case is set down for a trial commencing in late February 2013. Trial is expected to take about 15 working days. Atlas and NCC say that there is reason to believe that SD2007’s assets will be insufficient to meet significant costs in defending its claim, and that justice requires that they be protected at least to the extent of the scale costs that could be awarded.

[4] SD2007 opposes both applications. It says that Atlas and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NZHC 3084
Decision Date: 20 November 2012

CaseChat Overview and Summary

This proceeding concerns commercial warehouse premises at 18 David McCathie Place, Silverdale, which the owners of four separate units in the building claim were constructed with defects, including defective concrete floors. They have sued, among others, the development company, its directors and shareholders, and engineers associated with the design and construction of the building for compensatory damages for the alleged defects. The development company, Silverdale Developments (2007) Limited (SD2007), is now in liquidation. It was put into liquidation by a resolution of its shareholders. It is defending the claim, and has also issued cross-claims against the engineers and third party claims against all persons who had any part in the allegedly defective work. Atlas Concrete Limited (Atlas) and Northern Concrete Cutters Limited (NCC) have applied for an order that SD2007 provide security for their costs. The case is set down for a trial commencing in late February 2013. Atlas and NCC say that there is reason to believe SD2007’s assets will be insufficient to meet significant costs in defending its claim, and that justice requires that they be protected at least to the extent of the scale costs that could be awarded. SD2007 opposes both applications. It says that Atlas and NCC have not passed the threshold test of showing that there is reason to believe it will be unable to meet their costs if its claim against them is unsuccessful. It also says that in any event there is no sufficient basis for exercising the Court’s discretion in the matter to award security. The Court found that there was reason to believe SD2007 would be unable to meet an award of costs in favour of Atlas and NCC if SD2007’s claims against them do not succeed. The Court also found that the balancing of interests favoured an order for security. The Court ordered SD2007 to provide security for the costs of Atlas and NCC in the sum of $35,000 each. The security was to be provided by 17 December 2012. In the event security was not provided by that date, SD2007’s claims against Atlas and NCC would be stayed from that point until such time as security was provided.

Orders