Anderson v De Marco

[2019] NZHC 570

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-622

[2019] NZHC 570

BETWEEN

NORMAN HUGH ANDERSON and REBECCA ALICE CARRASCO
Plaintiffs

AND

EUGENE JOHN DE MARCO

Defendant

Hearing:

25 March 2019

Appearances:

E Dalzell for plaintiffs

R Laurenson for defendant

Judgment:

26 March 2019

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]                  Before the Court is an application under r 9.34 of the High Court Rules 2016 for an order authorising the plaintiffs to carry out certain testing on the residential property owned by the defendant which is the subject matter of the proceeding. It is common ground that an order should be made. The controversary is as to the arrangements for carrying out the testing and its scope.

[2]                  At the outset, Mr Dalzell for the plaintiffs sought an order excluding affidavit evidence filed on behalf of the defendant from Mr Michael Winton. He did so on three grounds. I will focus on one. He submitted that Mr Winton was precluded from putting himself forward as an independent expert witness because he, personally or through his company, had an interest in the proceeding. It turns out that Mr Winton’s company, Building Science Ltd, was retained by the defendant to undertake a survey of the property which is the subject of this proceeding prior to it being put on the market. His report was provided to interested parties. Aspects of this feature in the

ANDERSON v DE MARCO [2019] NZHC 570 [26 March 2019]

plaintiffs’ cause of action as they allege that it contains misrepresentations which induced them to enter into a contract to purchase the property. Thus, the accuracy of aspects of Mr Winton’s conclusions are at issue in this proceeding. As Mr Dalzell submits, that makes Mr Winton or his company a potential party to this proceeding, although there is no suggestion at present that Mr de Marco proposes to make a third party claim.  I agree with Mr Dalzell’s submission that that is enough to preclude   Mr Winton being accepted by the Court as a genuinely independent expert witness.

[3]                  However, for the purposes of this interlocutory application only, I declined to exclude Mr Winton’s evidence.

[4]                  In those circumstances, Mr Dalzell sought to introduce a response from the plaintiffs’ expert witness. I declined to allow that evidence in on the basis that its introduction at this stage would be prejudicial from the defendant’s perspective.

[5]                  It is not necessary to go into a great deal of detail as to the substantive claim. Essentially, in December 2017, the parties entered into a contract pursuant to which the defendant agreed to sell and the plaintiffs agreed to purchase the former’s property in Wellington. Subsequently, after the plaintiffs had paid a ten per cent deposit, but prior to settlement, the plaintiffs concluded — rightly or wrongly — that the defendant had made certain pre-contractual misrepresentations and breached certain warranties contained in the contract.

[6]In June 2018 the plaintiffs gave notice of cancellation of the contract.

[7]                  Having done so, they now sue for the return of their deposit and damages in respect of what they say are wasted costs and expenses.

[8]                  The pleadings raise issues such as whether the defendant misrepresented the state of the property, whether there was full disclosure of all work carried out on the property, whether all known defects were disclosed, whether all work carried out that required resource consent was consented and whether any such work was carried out in accordance with such consents.

[9]                  The plaintiffs say that they need to have their expert, Mr Thomas Wutzler carry out testing in order better to inform themselves about these things. The defendants accept that. Mr Wutzler’s affidavit of 18 March 2019 exhibits a report he has prepared in which he describes the tests he believes are necessary. There are 31 of them. Most involve only the insertion of probes into the sub-structure of the building to assess moisture levels. But the remainder involve more destructive processes – in nine areas the removal of interior cladding, and, most controversially, in one area the removal of exterior cladding. The defendant’s expert, Mr Winton says that the destructive aspects of this proposal are unnecessary. The defendant’s contention is that any order should be limited to the insertion of probes to assess moisture levels, and that only if this suggests the existence of problems should any further testing be ordered.

[10]              With one qualification, my judgement is that the plaintiffs should have the order they seek.

[11]              It is for the plaintiffs to determine what investigations they need to make in order to prepare their case. Admittedly, given that the testing envisaged here — and generally in cases of this sort — intrudes on the defendant’s property rights, that ought to be as limited as possible. The question is one of balance between the plaintiffs’ need to carry out the investigations they regard as necessary and the defendant’s right to minimise the intrusive nature of any testing. In my view, the Court should be slow to interfere by directing a party as to the type of investigations that should be carried out and that a plaintiff should be entitled to carry out what testing it wishes, provided this is reasonable and appropriate safeguards are in place so that the defendant is not overly inconvenienced and the plaintiff assumes full responsibility for rectifying any damage caused.

[12]              To the extent that it is possible to make any assessments of such matters on the basis of untested affidavit evidence, I am inclined to prefer Mr Wutzler’s evidence as to what is required here, primarily because, on my reading of the affidavits, he has a better grasp of the issues in the case. In his affidavit, Mr Winton tended to start from the assumption that the only — or perhaps principal — issue is the extent of water ingress and consequential damage to the property. That ignores the components of the case relating to the alleged misrepresentations or breaches of warranty relating for

example to work carried out in the past. The plaintiffs have been entirely open in saying that one of the things they want to do is ascertain what work has been carried out so that an assessment can be made as to whether or not it required building consent and the like.

[13]Pursuant to r 9.34, I make the following orders:

(a)the plaintiffs’ technical adviser, Mr Wutzler, is authorised to carry out testing at the defendant’s  property  at  13  Fortification  Road,  Karaka Bay, Wellington;

(b)the testing shall take place commencing not before 9.00 am on 29 May 2019 and may continue as necessary but only between the hours of 9.00 am and 5.30 pm (unless agreed otherwise by the parties through their solicitors);

(c)Mr Wutzler is to be accompanied throughout by a qualified and experienced builder engaged by him for the purpose of carrying out all necessary work associated with the testing, and making temporary repairs to the same during the testing phase;

(d)at least 21 working days prior to testing commencing the plaintiffs’ solicitors are to inform the defendant’s solicitors of the builder who will accompany Mr Wutzler, providing them with the builder’s full name and a summary of his qualifications and experience. The defendant shall only be entitled to withhold his consent to a builder on reasonable grounds. If any issue arises about the builder, the matter may be referred to the Court for determination as a matter of urgency;

(e)the defendant and any expert or experts engaged by him in connection with this proceeding shall be entitled to be present throughout the testing process. For the avoidance of doubt, the scope of testing authorised is as set out in this order, and Mr Wutzler shall not require

the agreement of the defendant or his technical advisers before carrying out that work;

(f)the plaintiffs shall be responsible for making good any damage immediately following the testing phase and for that purpose will, directly or through their solicitors or Mr Wutzler, engage qualified and experienced tradesmen including a builder, a plasterer and a painter and decorator. All reinstatement work shall be done in accordance with good trade practice. For the avoidance of doubt, the whole wall or ceiling which has been the subject of destructive testing will be finished and painted ensuring an acceptable texture and colour match to the untested walls;

(g)The scope of work to be carried out by Mr Wutzler pursuant to this order is as set out in his report dated 28 November 2018, except that, referring to para 3.5 of that report, Mr Wutzler is not authorised to remove the exterior cladding referred to therein (or any other exterior cladding in the property), but may attempt to gain access to the relevant section of the property by the removal of interior cladding only;

(h)I reserve leave to either party to come back to the Court by memorandum to seek clarification on any of the above aspects of this order or as to any related issue.

[14]              Costs are reserved. I am disinclined to deal with costs until after the testing process and make-good work has been completed.

Associate Judge Johnston

Solicitors:

Parker & Associates, Wellington for plaintiffs The Law Connection, Waikanae for defendant