Auckland City Council v Unit Owners in Stonemason Apartment 27 Falcon Street Parnell HC Auckland CIV 2009-404-3118

[2009] NZHC 2584

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2009-404-003118

BETWEEN  AUCKLAND CITY COUNCIL Appellant

ANDUNIT OWNERS IN STONEMASON APARTMENT 27 FALCON STREET, PARNELL

First Respondents

ANDCLARK BROWN ARCHITECTS LIMITED

Second Respondent

ANDPAUL BROWN Third Respondent

ANDBULLER GEORGE ENGINEERS LIMITED

Fourth Respondent

Hearing:         2 September 2009

Appearances: H Rice for Appellant

P McKinnon for Fourth Respondent

Judgment:      11 December 2009 at 4:30pm

(RESERVED) JUDGMENT OF ANDREWS J [Appeal against removal of party]

Continued .../2

This judgment is delivered by me on 11 December 2009 at 4:30pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Solicitors:

Heaney & Co, PO Box 105391, Auckland (for Appellant)

McElroys, PO Box 835, Shortland Street Auckland 1140 (Fourth Respondent) Copy to:  Weathertight Homes Tribunal, Private Bag 92535, Auckland 1141

AUCKLAND CITY COUNCIL V BULLER GEORGE ENGINEERS LTD AND ORS HC AK CIV 2009-404-

003118  11 December 2009

-     2 –

ANDCITATION CONSTRUCTION LIMITED Fifth Respondent

ANDMARK SANDSTAD Sixth Respondent

ANDKIAN CONSTRUCTION LIMITED Seventh Respondent

ANDDAMON LAI Eighth Respondent

INTRODUCTION

[1]      Auckland City Council (“the Council”) has appealed against a decision of a member of the Weathertight Homes Tribunal (“the Tribunal) given on 27 April

2009, (“the decision”) in the course of an adjudication proceeding.[1]   In the decision

the Tribunal granted an application by Buller George Engineers Limited (“Buller

George”) to be removed from the adjudication proceeding.

[1] Weathertight Homes Tribunal TRI 2008-100 49 to 67 Procedural Order No 10 27 April 2009,

[2]      The grounds of appeal are that the Tribunal made errors of fact and law in the decision.

Background

[3]      The  adjudication  proceeding  concerns  a  block  of  apartments,  known  as Block 2 of Stonemason Apartments, built at 27-29 Falcon Street, Parnell, Auckland (“the apartments”).  Owners of the apartments and the Body Corporate have made claims against various parties involved in the design and construction of the apartments.  It is, in essence, a “leaky building” claim.

[4]      The  Council  is  the  first  respondent  to  the  claim.    The  claimants  allege breaches of a duty of care by the Council, in issuing building consents, carrying out inspections, and issuing Code Compliance Certificates.  Buller George was named as fourth respondent in the claim.  They were engaged as structural engineers for the building project.  Buller George provided the Council with a “Producer Statement – Construction  Review”  on  20  January  2000  (“the  producer  statement”).     The claimants alleged that Buller George breached a duty of care in the provision of engineering services in relation to the building project, and in its review of the design for the purpose of issuing the producer statement.

[5]      The claimants allege that as a result of various defects, and damage resulting from the defects, there has been extensive moisture ingress into the apartments, which has led to decay and damage.  One of the causes of leaks is said to be from the bolt fixings for “Juliet balconies” to windows on the exterior walls of the apartments.

The claimants have claimed $1,137,138.79 for remedial and associated work.  They have also claimed for consequential losses and general damages.

[6]      For the purposes of this appeal, the relevant defect is set out at item 9 of “Schedule   5   –   Defects   and   Damage”   to   the   claimants’   Further   Amended Adjudication Claim on behalf of Claimants” filed in August 2008:

9.        The Juliette [sic] balconies to some of the units on removal were found  to  have  large,  unsealed  holes  in  the  stucco  plaster  exterior  wall cladding allowing water entry through the unsealed bolt fixings.

[7]      On 25 July 2008 the solicitors for Buller George wrote to the other parties in the adjudication proceeding who were legally represented, and who were actively participating in the proceeding.  The letter set out Buller George’s contention that it was not an appropriate party to the proceeding, and sought the other parties’ consent to Buller George being removed as a party.   The claimants consented to Buller George being removed.  The Council did not consent.

[8]      Buller George applied to the Tribunal on 9 September 2008 for an order that it be removed as a party to the adjudication proceeding.   Its grounds for removal were those set out in the solicitors’ letter of 25 July 2008.   The Council filed a response, opposing removal, on 20 March 2009.

Removal of a party from an adjudication proceeding

[9]      The power to remove a party from adjudication proceedings is set out in s 112 of the Weathertight Homes Resolution Services Act 2006 (“the Act”):

112      Removal of party from proceedings

(1)       The tribunal may, on the application of any party or on its own initiative, order that a person be struck out as a party to adjudication proceedings if the tribunal considers it fair and appropriate in all the circumstances to do so.

(2)       This section is subject to section 57(2).

[10]     Section 57(2) provides that the Tribunal must comply with the principles of natural justice.

Tribunal’s decision

[11]     The Tribunal set out the general principles applicable to striking out a party noting (at para 2) that an application should only be made as a preliminary issue where a claim is so untenable in fact and law as to be unlikely to succeed.   The Tribunal then said, at para  3, that where a party opposes an application for removal on the basis of disputed facts, the party must produce or point to cogent evidence in support of the opposition.

[12]     At para 4, the Tribunal set out factors that, in the circumstances of the present case, were among those to be considered:

a)        The likelihood of success against Buller George;

b)The nature and quality of the evidence as to Buller George’s liability for leaks to the apartments;

c)        The relative significance of the allegations of breach of duty in the context of the overall claim;  and

d)The potential amount of any award against Buller George and the proportionality of any costs likely to be incurred.

[13]     The Tribunal then set out the competing arguments of Buller George and the Council.   At para 9 the Tribunal noted that both sides accepted that there were deficiencies in the way the Juliet balconies were installed, and that the unsealed bolt fixings had been a cause of water ingress.  At para 10, the Tribunal accepted Buller George’s   submission   that   it   did   not   have   any   direct   involvement   in   any waterproofing at any stage of construction.  At para 11, the Tribunal accepted that Buller George were engaged to provide engineering design and consultancy in relation to structural integrity, and found that there was no reliable evidence before the Tribunal that they were negligent in doing so.

[14]     At para 12, the Tribunal rejected the Council’s submission that Buller George had some responsibility for the leaks.  The Tribunal went on to say:

I do not accept that this is a viable argument particularly as any existing claim can only be a cross-claim from the Council.   The claimants are not proceeding with a claim against Buller George as they do not believe they have a viable claim against them.

[15]     At para 13, the Tribunal observed that even were it to conclude that Buller George were potentially negligent in failing to identify the roof waterproofing deficiencies in the fixing of the Juliet balconies, the Council had not pointed to any evidence to show how such a breach caused any loss to the claimants and/or to the Council.  At para 14, the Tribunal’s decision was summarised as follows:

14.      I  accordingly  conclude  that  it  is  fair  and  appropriate  for  Buller George Engineers Limited to be removed as a party to this claim.  I accept that they owed the claimants a duty of care but any allegations that they breached that duty of care are tangential.  The issues which have allegedly contributed to water ingress were not in relation to the work Buller George was contracted to provide.  In addition even if I were to conclude that there was tenable evidence of a breach there is no tenable evidence of a causative link to the remedial work undertaken.

Issues and approach on appeal

[16]     The issue on appeal is whether the Tribunal was correct in fact and law in concluding that it was fair and appropriate to strike out Buller George as a party to the adjudication proceeding.  The issue may be divided into two questions:

a)        What is the test to be applied in an application to strike out a person as a party to an adjudication proceeding? and

b)       Did the Tribunal apply that test correctly?

[17]     If the Tribunal did not apply the test correctly, it will then be necessary to apply the test to the facts, and so determine whether it would be fair and appropriate to strike out Buller George.   It is possible that the Tribunal may have erred in applying the test, but that the test, correctly applied, may still lead to the same outcome.

[18]     The appeal is brought under s 93(1) of the Act:

93       Right of Appeal

(1)       A party to a claim that has been determined by the tribunal may appeal on a question of law or fact that arises from the determination.

A decision to strike out a party is a determination of the claim in respect of that party.  The appeal is to be determined in accordance with Part 20 (Appeals) of the High Court Rules.  Rule 20.18 provides that the appeal is to be by way of re-hearing.

[19]     The principles to be applied when considering appeals are well summarised in the judgment of Asher J in Burns & Ors v Argon Construction Ltd & Ors.[2]    I adopt, with respect, His Honour’s comments at [14]:

[2] HC AK CIV 2008-404-7316 18 May 2009.

[14]      The principles relating to general appeals set out in Austin Nichols & Co Inc v Stiching Lodestar [2008] 2 NZLR 141 (SC) apply. In light of the observations of the Supreme Court in that case, the appellate court in an appeal by way of re-hearing such as this should carry out its own assessment of the facts and should not hesitate to substitute its own findings of fact. Thus the appellate court must apply an independent judgment to the conclusions reached by the Court of first instance. Nevertheless, Austin, Nichols & Co Inc v Stiching Lodestar makes it clear that the onus is still on an appellant to show that the first instance Judge or Tribunal was wrong: [4].

The test

[20]     The first issue to be considered is what test is to be applied in an application to strike out a person as a party to an adjudication proceeding.

[21]     Counsel were generally in agreement that the Tribunal’s expression of the test at para 2 of the decision was appropriate.  The Tribunal said:

It is generally accepted that an application for removal or strike out should only be made as a preliminary issue where a claim is so untenable in fact and law as to be unlikely to succeed. [Emphasis added.]

[22]     Such a test reflects the test applicable to applications to strike out claims under the High Court and District Courts Rules.  These provide:

a)       High Court r 15.1(1):

15.1     Dismissing or staying all or part of a proceeding

(1)       The Court may strike out all or part of a pleading if it –

(a)discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or

b)       District Court Rules r 2.50.1(a)

2.50     Striking out pleadings, staying or dismissing proceedings, and costs for want of prosecution

2.50.1 The Court may order that the whole or any part of a pleading be struck out if the pleading –

(a)Discloses no reasonable cause of action, defence, or case appropriate to the nature of the pleading; or

[23]     It  is  appropriate  that  the  test  to  strike  out  a  person  as  a  party  to  an adjudication proceeding under s 112 of the Act reflects the test applied to strike outs under the High Court and District Courts Rules.  The effect of striking out a person as a party to an adjudication proceeding is that a claim against that person cannot be pursued in the Tribunal.  That is the effect of a strike out under the High Court and District Courts Rules.

[24]     In Burns v Argon Construction Limited Asher J was dealing with an appeal against a decision of the Weathertight Homes Tribunal striking out a claim on the grounds that it was time-barred under the Limitation Act 1950.  At [17] His Honour noted that “general principles relating to strike out applications in the High Court and District Courts” can be applied to the application to strike out a claim in the Tribunal.

[25]     Those principles were expressed by the Court of Appeal in Attorney-General v Prince & Gardner[3] as follows:

[3] [1998] 1 NZLR 262 at 267.

A striking-out application proceeds on the assumption that the facts pleaded in the statement of claim are true. That is so even although they are not or may not be admitted.  It is well settled that before the Court may strike out proceedings the causes of action must be so clearly untenable that they cannot possibly succeed.  ... The jurisdiction is one to be exercised sparingly, and only in a clear case where the Court is satisfied it has the requisite

material ... but the fact that applications to strike out raise difficult questions of law, and require extensive argument does not exclude jurisdiction.  ...

[Citations omitted.]

[26]     On behalf of Buller George, Mr McKinnon submitted that the Tribunal could apply a wider range of factors then the High Court or District Courts.  He referred to a decision of the Tribunal in Cousins v Plaster Systems Limited.[4]   In that decision, at para 10, the Tribunal said that it:

... accepts the first respondent’s argument that the criteria for removal are analogous with but not identical to the principles applicable in strike out applications in the High Court/District Court.

[4] Weathertight Homes Tribunal TRI 2008-0000107 Procedural Order 3 23 January 2009.

[27]     There are hints of a wider approach in decisions on s 112.  In Burns Asher J

said at [17]:

There may be circumstances where a party chooses to rely solely on the “fair and appropriate” ground in s 112.  That has not been the position taken by any of the parties in relation to this application.  They have conducted the argument on strike out lines.  I have no doubt that if an application should be struck out following an application of strike out principles, it will follow that it is “fair and appropriate” to strike out the relevant party.  In Kay v Dickson Lonergan Limited & Ors HC AK CIV-2005-483-2001 31 May 2006, Ellen France J, in an application under the 2002 Weathertight Homes Act, which contained an equivalent provision to s 112 (at s 34), the application to strike out was considered in accordance with accepted strike out principles.   I intend to proceed on this basis.

[28]     In Kay v Dickson Lonergan Ltd[5] Ellen France J said at [36]:

[5] HC AK CIV 2005-483-201 31 May 2006.

It is common ground that the relevant principles for the strike out equate with those applying to a strike out in either the District or the High Courts, in other  words  as  the  adjudicator  accepted,  the  power  is  to  be  exercised sparingly and in clear cases.

Then at [84] – [87]:

[84] In the context of the hearing of the appeal, the Council sought to amend its notice of appeal. It wanted to also challenge the adjudicator’s decision not to remove the Council on more general grounds.

[85] This relates to the adjudicator’s power to remove a party where that is fair and appropriate in all the circumstances (s 34). In this context, the Council says that the passage of time, the uncertainty of any situation in which the Council owes a duty of care in relation to the issue of a code compliance certificate, and the intervening remedial work, are relevant factors.

[86] The appellants opposed the grant of leave to amend and said, in any event, the adjudicator’s decision was correct.

[87] The adjudicator has a broad discretion in this regard. No error in approach in the exercise of that discretion has been identified. Accordingly, while leave to amend is granted, there is no basis for interfering with the decision of the adjudicator to decline to remove the Council as a party.

[29]     At para 18 of Cousins, the Tribunal set out factors which the Tribunal needed to weigh up as including, but not necessarily limited to:

(a)       likelihood of success against the party seeking removal;

(b)      the nature and quality of the evidence as to the liability for the leaks in the building, i.e. the “tenability” test;

(c)       the relative significance of the allegations of breach of duty in the context of the overall claim;

(d)the possible amount of any award against the party applying for removal;

(e)       the  proportionality  of  that  liability  with  the  costs  likely  to  be incurred;

(f)       likelihood of delay (see Kells[6] [48]);

[6] Kells v Auckland City Council & Ors HC AK CIV 2008-404-1812 30 May 2008.

(g)       undue complexity caused by a proliferation of parties.

Factors (a) to (e) were set out as matters the Tribunal needed to consider in the decision under appeal, at para 4 – refer [12], above.

[30]    It can be accepted that the Tribunal’s power to strike out parties to an adjudication  proceeding  is  akin  to  that  of  the  High  Court  and  District  Courts, although arguably somewhat broader.  Decisions under s 112 have not conclusively established whether it is wider in its scope. In the present case, despite setting out factors to be considered (consistent with applying a “wider scope” of a power to strike out) the Tribunal’s decision in fact addresses only the question whether there

is a tenable claim (expressed as a “viable claim” in para 12).   Thus, even if the broader interpretation were appropriate, the likelihood of success would remain the determinative factor.  Accordingly, it is not necessary to express any conclusive view as to the scope of the test to be applied by the Tribunal.

[31]     At para 3 of the decision under appeal the Tribunal said:

Where, however, a party is opposing an application for removal on the basis of disputed facts they must produce or point to some cogent evidence in support of their opposition.  It is insufficient to say that there are disputed facts  without providing some  detail of what they are.   In  addition it is insufficient to say there could be disputed facts that may arise in the course of adjudication.

[32]     On behalf of the Council, Ms Rice submitted that para 3 is wrong in law.  In his oral submissions Mr McKinnon acknowledged that para 3 does not correctly state the law.   I accept that the Tribunal has incorrectly stated the law as to an application to remove or strike out a person as a party to an adjudication proceeding. As the Court of Appeal said in Prince & Gardner, a striking out application proceeds on the assumption that the facts pleaded in the statement of claim are true.   The authorities do not support a proposition that the party opposing a strike out must produce or point to “cogent evidence” (or indeed any evidence) in support of their opposition.  The assumption must be that all facts pleaded in the statement of claim are true.

Did the Tribunal apply the test correctly?

[33]     Ms Rice submitted that the Tribunal did not apply the test for removing or striking out a party to the adjudication proceeding correctly.  She submitted that the Tribunal was required to start from the “Further Amended Adjudication Claim” and the documents before the Tribunal.  Further, she submitted that the Tribunal made several errors of fact.

[34]     It is appropriate to turn first to Ms Rice’s submissions as to errors of fact.

Para 9 of decision

[35]     Ms Rice submitted that the Tribunal made an error of fact in finding at para

9, as a factor in favour of removing or striking out Buller George as a party, that:

Buller George was not engaged to ensure that there was adequate waterproofing,  their  engagement  was  to  ensure  that  there  was  adequate fixings to the building structure.

[36]     Ms  Rice  first  referred  to  the  contract  between  Buller  George  and  the architects.   This contained the following:

Services to be included:  Preliminary Design, working drawings, consent &

tender, Construction Monitoring.

Services to be excluded:   Geotechnical report, topographical survey, fire report, waterproofing and glazing details.

[37]     Ms Rice submitted that the inclusion of “construction monitoring” imposed on  Buller  George  a  responsibility  to  inspect.    She  also  submitted  that  Buller George’s responsibility with respect to the structural integrity of the Juliet balconies (accepted by Buller George) necessarily included inspection as to waterproofing. This was for the reason that, in the absence of waterproofing, the structural integrity of the balconies, to the required standard of 50 years, could not be assured.  Ms Rice submitted that the Tribunal made an error of fact in finding that Buller George’s contract excluded any responsibility for waterproofing.   She submitted it was intrinsically included, as part of the structural integrity issue.

[38]     Secondly, Ms Rice referred to the producer statement.  This was issued by Buller George on 20 January 2000 and is stated to be a “Construction Review” of “all” building work at 27-29 Falcon Street, and states:

As an independent person approved by the Auckland City Council to carry out a Construction Review, I or persons under my control have obtained all necessary information and carried such periodic reviews of the work as are in accordance with the Auckland City Council’s published criteria as are appropriate to the conditions of the Building Consent.  I have also conducted such additional reviews which were necessary in the circumstances.  Based upon the information obtained and the reviews carried out I am satisfied on reasonable  grounds  that  the  building  work  specified  above  has  been

completed  to  the  extent  required  by  the  above  Building  Consent  and complies with the Building Code.

I understand that if this Producer Statement is accepted, it will be relied on by Auckland City Council for the purposes of establishing compliance with the Building code.

[39]     Ms Rice submitted that independently of the contract between Buller George and  the  architects,  the  provision  of  the  producer  statement  imposed  a  direct obligation on Buller George to inspect the fixings as to waterproofing.

[40]     Mr  McKinnon  submitted  that  the  Tribunal  was  reasonably  entitled  to conclude that there was no cogent or tenable evidence that Buller George bore any liability   for   defects   in   the   building.      In   the   light   of   Mr   McKinnon’s acknowledgement that the Tribunal was wrong in law in saying, at para 3 of the decision, that a person opposing removal or strike out must produce or point to “cogent evidence” in support of its opposition, that submission cannot be sustained.

[41]     Mr McKinnon also submitted that the Tribunal was entitled to conclude that the contract between Buller George and the architects excluded any responsibility for waterproofing.  That submission is sustainable insofar as “waterproofing and glazing details” are among services “excluded”.  However, it takes no account of the fact that “construction monitoring” is among services that are “included”.

[42]     Further, the submission takes no account of the producer statement.   Mr McKinnon  submitted  that  this  was  signed  on  the  basis  that  it  related  only  to structural  integrity.    That  may  be  the  Tribunal’s  finding  after  it  has  heard  full evidence on the issue (and Mr McKinnon accepted that this is a “trial matter”), but on the face of the document there is no such limitation.

[43]     It must also be recalled that in an application to strike out a claim against a party, the starting point is the assumption that the facts pleaded in the claim are true. In this case, the claimants allege that Buller George owed a duty of care in the provision of engineering services and in the review of the design for the purposes of issuing a producer statement.

[44]     I am satisfied that the Tribunal made errors of law and fact when it concluded at para 9 that Buller George was not engaged to ensure there was adequate waterproofing.  First, it made an error of law by not proceeding on the assumption that the facts pleaded were true.  Secondly, it made an error of fact by disregarding the “included” terms of the contract between Buller George and the architects, and by disregarding the producer statement.  I am satisfied that had the Tribunal applied Prince & Gardner, correctly, it could not have concluded that there was no tenable case against Buller George that the terms of its engagement did include ensuring there was adequate waterproofing.

Para 10 of decision

[45]     Ms Rice submitted that the Tribunal made an error of fact at para 10 of the decision, in finding that:

It was accordingly reasonable for Buller George to assume that those who are properly cast with the waterproofing would be ensuring its adequacy.

[46]     She submitted that evidence before the Tribunal, in the form of an expert’s report filed by the Council, was to the effect that it was unreasonable for Buller George to assume that others would ensure the adequacy of the waterproofing.  In the light of this evidence which, she submitted, the Tribunal was required to assume to be true, the Tribunal could not conclude that Buller George could reasonably assume that others would ensure the adequacy of waterproofing.

[47]     Mr McKinnon submitted that it was reasonable for the Tribunal to reach the conclusion it did in para 10, on the evidence available to it, and to reject the evidence of the Council’s  expert.   He submitted that the expert’s  report did  not provide enough evidence as to Buller George’s responsibility in respect of waterproofing.

[48]     With respect, Mr McKinnon’s submission again draws on the Tribunal’s requirement that a party opposing strike out provide “cogent evidence”.  As noted already, that submission cannot be sustained.

[49] For the same reasons as set out at [44] above in relation to para 9 of the decision, I accept that the Tribunal made errors of fact and law in reaching the

conclusion set out in para 10, and so could not conclude that there was no tenable case against Buller George.

Para 11 of the decision

[50]     Ms Rice submitted that the Tribunal also made errors of law and fact at para

11 of the decision, in finding that:

It would have been outside of Buller George’s brief for them to start commenting or supervising and inspecting the work performed by other professionals when it was outside their area of expertise and their contractual engagement.   They were engaged to provide engineering design and consultancy in relation to structural integrity.  There is no reliable evidence before me, which suggests that they were negligent in doing this.

[51]     Ms Rice’s submissions on behalf of the Council, and those of Mr McKinnon on behalf of Buller George, essentially repeated those set out in relation to paras 9 and 10 of the decision.  Again, for the reasons already set out at [44], above, I am satisfied that the Tribunal made errors of law and fact in reaching the conclusions set out in para 11, and so erred in finding that there was no tenable case against Buller George.

Para 13 of the decision

[52]     Ms Rice submitted that the Tribunal made an error of fact at para 13 of the decision in finding that:

Even if I were to conclude that Buller George were potentially negligent in failing to  identifying the  waterproofing deficiencies in  the  fixing of  the Juliette [sic] balconies the Council has not pointed to evidence to show how such a breach caused any loss to the claimants and/or to the Council.

Here, the Tribunal has concluded that the Council has failed to point to evidence that establishes causation.

[53]     Ms  Rice  referred  to  evidence  as  to  causation.     She  referred  first  to  the evidence from a building surveyor that: [7]

The water ingress and timber decay found to the timber framing around the fixing bolts has been caused by a lack of waterproofing and has contributed to the need to reclad the building.

[7] Statement of Alexander & Co, 9 March 2009.

[54]     Ms Rice then referred to the report of the Weathertight Homes Resolution Service Assessor which  concluded that one of the causes of water entering the apartments was: [8]

The mounting bolts with which the Juliet balconies are attached to the building are unsealed and allow water to enter the exterior walls through gravity leakage.

[8] Department of Building and Housing: Weathertight Homes Resolution Service, Assessor’s

Report: Common Property Report :  claim no. 2948 at 6.1.5. 

[55]     Finally, Ms Rice referred to a report prepared by an expert engaged by the claimants, in which “poor structural fixing of external steel decks” is listed as one of the “major items that have caused this apartment complex to be reclad”.[9]

[9] CoveKinloch Consulting “Site Recladding Condition Report on Stonemasons Apartments at

27 Falcon Street, Parnell, Auckland” on behalf of Body Corporate 199735, 7 December

2008, at 3.1.

[56]     Mr McKinnon submitted that the evidence referred to by Ms Rice could be challenged, in particular as to whether it demonstrated a “waterproofing” or “structural” problem.  That may be, as noted earlier at [42], a matter as to which a finding may be made after a defended hearing, but it is not a relevant consideration on an application to strike out.   I am satisfied that on the pleadings and material before it, the Tribunal could not conclude that there was no tenable case as to causation.

Result

[57]     I am satisfied that the Tribunal erred in fact and law and finding at para 14 of the decision that there was no tenable evidence of a breach of duty by Buller George and no tenable evidence of a causative link to the remedial work undertaken, and that it was  fair  and  appropriate for  Buller  George  to  be  removed  as  a  party to  the adjudication proceeding.  The appeal is therefore allowed.

[58]      The Council sought relief on appeal in the alternative – that is either that the Tribunal’s decision that Buller George be removed as a party to the claim be quashed or that the matter be referred back to the Tribunal for a further hearing.   I have concluded that the first alternative is appropriate.

[59]     Accordingly, there will be an order that the Tribunal’s decision to remove or strike out Buller George Engineers Limited as a party to the adjudication proceeding is quashed, and Buller George remains a party to the proceeding.

[60]     The Council also sought costs.  It is appropriate that costs follow the event.  I note that the parties have agreed that the appeal is appropriately categorised as 2B for the purposes of costs.[10]    Accordingly, the Council is entitled to costs on a 2B

[10] Minute (No 2) of Winkelmann J, 22 June 2009.

basis, together with disbursements as fixed by the Registrar.

Andrews  J