Auckland Council v Andrew Plastering Limited

[2014] NZHC 1992

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-005099 [2014] NZHC 1992

BETWEEN

AUCKLAND COUNCIL

Plaintiff

AND

ANDREW PLASTERING LIMITED First Defendant

Hearing:	21 August 2014
Appearances:	T Wood for Plaintiff No appearance for First Defendant
Judgment:	25 August 2014

JUDGMENT OF ANDREWS J [Application for judgment by formal proof]

This judgment is delivered by me on 25 August 2014 at 9.30 am pursuant to r 11.5 of the High Court Rules.

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

AUCKLAND COUNCIL v ANDREW PLASTERING LTD [2014] NZHC 1992 [25 August 2014]

Introduction

[1]      The Auckland Council has applied for judgment by formal proof in this proceeding against the defendant, Andrew Plastering Ltd (“APL”).  The proceeding was served on the defendant on 11 September 2012.  APL did not file a statement of defence to the Council’s claim, and did not take any other steps in the proceeding. Mr Wood, who appeared for the Council, advised that efforts to involve APL in settlement discussions met with no response.

[2]      APL was advised of the formal proof hearing, by a notice dated 27 May

2014.  On 11 June 2014, the Registry received an email from Mr Graeme Andrew which said:

Please note Andrew Plastering Ltd had no involvement with this project and therefore refutes any connection to this claim.  This company was Stafford Park Ltd at the time of this project and had a name change to its current form approx. 2005/6.

Andrew Plastering Co. 1994 Ltd may have been involved with the project and the council lawyer may have been associating some correspondence

from this company using an abbreviated heading of Andrew Plastering, or

similar…they have been previously notified of this by phone but appear to have chosen to ignore such advice.

No representative of Andrew Plastering Ltd will attend this hearing.

We view this as a clumsy, unprofessional error by another party, company data is readily available to all, and have no wish to waste our precious time

due to same.

Please advise removal of our firm from these proceedings.

[3]      The Registry responded to Mr Andrews the same day, confirming that the formal proof hearing would proceed.

[4]      The Council has provided affidavits sworn by Ms Sarah Hann (a Council senior manager), Mr Clint Smith (a registered building surveyor), and Ms Holly Waldron (who annexed a brief of evidence of Mr Stephen Alexander, a building surveyor), in support of its claim.  A memorandum in support of the formal proof hearing  has  been  filed,  and  Mr Wood  made  oral  submissions  on  behalf  of  the Council. A draft order has been submitted.

[5]      There was no appearance by or on behalf of APL.

Background

[6]      APL was engaged as a solid plastering subcontractor in the construction of Block E  (comprising  three  units)  of  the  “Parks  on  Domain”  development  in Auckland, between 2002 and 2003.   The building was later found to have watertightness issues and in 2006, the body corporate and 14 unit owners issued “leaky buildings” proceedings against the Council and other defendants (“the head proceeding”).  The head proceeding was settled by an agreement dated 30 January

2013.  Under the settlement agreement, the Council paid $5,709,000, in relation to repair work relating to the whole development (that is, in respect of Blocks A, B, C, D, and E).

[7]      The Council sought contribution from APL in respect of Block E, but rather than doing so as a third party in the head proceeding, the Council issued a separate proceeding  claiming  contribution  to  any  sum  the  Council  was  required  to  pay. As noted earlier, APL did not file a statement of defence, or take any other steps in the proceeding.

[8]      In his affidavit evidence, Mr Smith says, relying on Mr Alexander’s evidence filed  in  the  head  proceeding,  that  there  were  eight  specific  defects  directly attributable to the work carried out by APL on Block E, as follows:

(a)       Absence of drainage provision at the transition from timber framed walls to masonry walls;

(b)Inadequate provision and installation of sill and jamb flashings to windows;

(c)       Absence of drainage provision to window and door heads;

(d)Inappropriate application of plaster spanning both timber and masonry walls at deck type 5;

(e)       Inadequate methods used to join timber frame balustrades walls and masonry walls;

(f) (g)	Incorrect construction of vertical control joints in masonry walls; Cladding not constructed according to plans and specifications and
highly variable in composition; and
(h)	Inadequate sealing between outer side of drainage pipes and stucco
plaster.
[9] subst	The antial w	only  amendment  is  remedying  the  defects  would  have  required ork:
(a)	Recladding  Block  E’s  upper  level,  involving  removing  the  solid
plaster  and  hardibacker  cladding  substrate  from  the  timber  walls, repairing damage and correcting defects the permit water ingress, and
reconstructing the external timber framed walls and plaster finishes; and
(b)	Reconstructing the balcony balustrade walls, involving removing the balustrade copper flashings and stucco plaster, repairing the internal
balustrade framing as required, correcting construction defects, and reapplying the stucco plaster and copper cap flashings.

[10]     Mr Smith estimated the cost of the work asset out above at $518,000.48, out of the total cost of repair of Block E, of $738,726.   The Council seeks judgment against APL in the sum of $414,400, on the basis of an apportionment of 80 per cent of the repair costs to the APL, and 20 per cent to the Council.1

[11]     Mr Wood also referred me to the subcontractor’s guarantee for the plastering

work for Block Exhibit which is signed and given by APL, and invoices for progress claims, facsimiles and day work sheets, all of which are clearly submitted by APL.

1      Citing Morton v Douglas Homes Ltd [1984] 2 NZLR 548 (HC) at 612-614; and Body Corporate

188529 v North Shore City Council [2008] 3 NZLR 479 (HC) at [606](e).

Decision

[12]     Pursuant to r 15.9 of the High Court Rules, where the plaintiff’s claim is not for a liquidated demand, and the defendant has not filed a statement of defence, the plaintiff may seek judgment by way of formal proof.  The plaintiff must file affidavit evidence to establish to the Court’s satisfaction, each cause of action relied on, and to calculate and fix damages.

[13]     The Council’s claim against APL is in negligence, being a breach of its duty of  care  to  the  unit  owners  to  carry  out  its  plastering  work  to  a  proper  and workmanlike standard and in accordance with the Building Act and Building Code. I am satisfied on the evidence presented that APL carried out the plastering work on Block E, and that it did so negligently and in breach of its duty of care.  Further, I am satisfied that the cost of repair is properly calculated as being $518,400.48, and that APL should be ordered to pay 80 percent of that cost, being $414,400.

[14]     APL is clearly the entity named in relevant documents as the sub-contractor for the solid plastering work on Block E.  The Council alleged that APL carried out the work, and did so negligently.  APL did not file any defence to the claim.  The email sent by Mr Andrew is not a statement of defence, and in any event, he chose not to appear at the formal proof hearing, or to take any other steps to defend the claim.

[15]     I am satisfied that judgment should be entered for the Council against APL in the sum of $414,400, together with costs and disbursements in accordance with the

draft order submitted.

Andrews  J