Body Corporate 183059 v Auckland City Council HC Auckland CIV 2007-404-2110

[2010] NZHC 1195

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2007-404-2110

BETWEEN  BODY CORPORATE 183059

First Plaintiff

AND  SOKOL LIMITED & ORS Second Plaintiffs

ANDAUCKLAND CITY COUNCIL First Defendant

ANDPROPERTY CONCEPTS (NO. 2) LIMITED

Second Defendant

Hearing:         (on papers) Judgment:   13 July 2010 at 4

JUDGMENT OF ASSOCIATE JUDGE DOOGUE

[Costs judgment on discontinuance of first defendants application to strike out]

This judgment was delivered by me on

13.07.10 at 4 pm, pursuant to

Rule 11.5  of the High Court Rules. Registrar/Deputy Registrar

Date……………

Counsel:

Grimshaw & Co, P O Box 6646, Auckland – [email protected]

Heaney & Co Solicitors, (F McGregor-Tate) P O Box 105391 – [email protected] Bell Gully, (B Cash), P O Box 1291, Wellington – Brenda[email protected] Jones Fee, Auckland –  greg[email protected]

Paul Dale, P O Box 130, Auckland – [email protected]
Gascoigne Wicks, Blenheim  – [email protected]
Mr A Gilchrist, P O Box 5444, Auckland -  [email protected]
Mr J Ropati, Barrister, Auckland – [email protected]

Kennedys, P O Box 3158, Auckland – [email protected]

BODY CORPORATE 183059 & ORS V AUCKLAND CITY COUNCIL & ORS HC AK CIV-2007-404-2110

13 July 2010

ANDMASTER BUILD SERVICES LIMITED Third Defendant

ANDC H L LEUSCHKE Fourth Defendant

ANDLEUSCHKE GROUP ARCHITECTS LIMITED (in liquidation)

Fifth Defendant

ANDARTHUR TAYLOR BUILDERS LIMITED

Sixth Defendant

ANDARTHUR MARK TAYLOR Seventh Defendant

ANDEQUUS INDISTRIES LIMITED Eighth Defendant

AND  G D BOND Ninth Defendant

ANDSSC GROUP LIMITED Tenth Defendant

AND  C L EDEN

Eleventh Defendant

AND  R J ANDERSON (t/a Richard J Anderson

Ceramics)

Twelth Defendant

ANDLEUSCHKE GROUP LIMITED (discontinued)

First Third Party

ANDARTHUR TAYLOR BUILDERS LIMITED

Second Third Party

ANDA M TAYLOR Third Third Party

AND  D J BRIDGMAN Fourth Third Party

ANDM A COOPER Fifth Third Party

ANDC H L LEUSCHKE Sixth Third Party

ANDLEUSCHKE GROUP ARCHITECTS LIMITED (in liquidation)

Seventh Third Party

ANDD C LIGGINS Eighth Third Party

ANDEQUUS INDUSTIES LIMITED First Fourth Party

AND  G D BOND

Second Fourth Party

ANDSSC GROUP LIMITED Third Fourth Party

AND  C L EDEN

Fourth Fourth Party

AND  R J ANDERSON (t/a Richard J Anderson

Ceramics)

Fifth Fourth Party

[1]      There are two matters that I need to decide:

a)        The overall costs category to which this proceeding belongs and

b)The plaintiffs’ application for costs on an application for summary judgment filed by the first defendant which has been discontinued.

[2]      These proceedings involve a claim in respect of a non-weathertight apartment complex at 42 St Benedicts Street, Newton.  The proceedings were started in 2007. The  plaintiffs’  counsel  advises  that  the  claim  is  for  damages  of  approximately

$3,000,000 - $4,000,000.      By my count there are 27 parties to the proceeding although one party has been discontinued against resulting in a net figure of 26 parties.    There is the usual range of legal entities included as defendants and third parties.   The Auckland City Council, the first defendant is sued together with the alleged developer, architects and trades people.  There are numerous third party and fourth party cross claims.

[3]      Rules for the categorisation of proceedings are set out in rule 14.3 of the High Court Rules and are well known.  Essentially the choices for the Court in this case are between category 2 and category 3.   Catagory 2 is said to be appropriate in “proceedings of average complexity requiring counsel of skill and experience considered average in the High Court”.   Category 3 is said to be suitable for “proceedings that because of their complexity or significance require counsel to have special skill and experience in the High Court”.

[4]      In my view these proceedings are Catagory 3 proceedings.  I now set out my reasons for so concluding.

[5]      The first point is that the proceedings are complex.  The number of parties to the proceedings alone justify them as being so described.   The number of parties, quite apart from taxing the organisational skills of counsel and the solicitors, means that separate consideration has to be given to formulating the claim against each defendant and amending it as required.  While the plaintiff is not proceeding directly

against the third and fourth parties, their part in the proceedings has to be kept under observation particularly if a negotiated settlement is in contemplation because the expectation would be that they would contribute to such a settlement.

[6]      The issues for decision in the case are numerous and complicated and that too bears on the question of whether they had special complexity.  The first defendant in his memorandum for the first conference in June of 2007, set out some 18 “essential issues of fact and law”.   Some of those may have been resolved by subsequent judgments of this Court and the Court of Appeal but those that remain present difficulty.  The issues were said to include whether a duty of care existed, limitation issues, whether owners purchased with knowledge of the defects, nature of any contractual warranties and or other protective mechanism available to each second plaintiff and whether a defence of contributory negligence was available.  Then in the area of quantum it is noted that not all the second plaintiffs’ claims would be the same and that individual particularisation of the quantum claimed would be required. Each plaintiff is required to clarify the location of each defect, the description of the damage that was said to have occurred as a result of the defect, what omission by the Council was said to have caused that defect and what repairs would be carried out to remedy the problem.  Detailed suggestions as to the range of discovery was set out in the first defendant’s memorandum which ran to some 2 ½ pages on their own.

[7]      The foregoing discussion is limited to the matters that the first defendant apprehended would be at large in the case.   I accept that there has been some condensation and reduction of the issues since that memorandum was filed but the litigation is still of genuine complexity.

[8]      The  other  limb  of  14.3  concerns  whether  counsels  special  skill  and experience in the High Court are required on account of the “significance” of the proceeding.  In my view that question must be answered in the affirmative as well. The proceedings are significant in that a very substantial number of people have had their  lives  disrupted  as  a  result  of  acquiring  properties  in  a  non-weathertight apartment  building.    They  have  suffered  significant  losses  –  leaving  apart  the question of who, if anyone, is legally responsible to compensate them for those losses.  A not insignificant amount of money is at stake.  From the Court’s point of

view, it is important that counsel with a proper level of skill and experience is available to provide the Judge dealing with the case with an appropriate level of assistance in resolving the case.

[9]      For  all  those  reasons,  I  consider  that  the  proceeding  is  a  Category  3 proceeding.

Costs on summary judgment application

[10]     On  31  March  2009  the  first  defendant filed  an  application  for  summary judgment and for strike out orders.  In the application the first defendant sought an order under s 26N of the Judicature Act 1908 directing transfer of the application for hearing before a High Court Judge on the grounds that the nature of the question in issue in the proceedings was of sufficient complexity that it would be expedient for the matter to be referred to a Judge.

[11]     That  application  was  withdrawn  before it  could  be  heard  but  not  before substantial defences were filed to it.   The application sought to establish that the claims brought by the plaintiffs were statute-barred.  Detailed reference was made to the date when the plaintiffs or experts retained by them ought to have reasonably discovered the defects in the apartment buildings.

[12]     The plaintiff says that a very substantial amount of work was involved in preparing the opposition to the applications. That submission appears to be well- founded.    As part of the defence to the applications the plaintiffs’ solicitors were required to prepare a substantial affidavit from an expert witness and, by my count, at least 28 affidavits were obtained from individual apartment owners and experts. The affidavits appear to have been designed to show that the individual purchasers acquired them in ignorance of the weather-tightness issue problems and to provide evidence as to the date when the individual owners first became aware of water ingress and consequential damage.

[13]      Counsel  for  the  plaintiffs  by  memorandum  advises  that  as  a  result  the amount that the solicitors invoiced to the plaintiffs was $74,481.75 including GST. The work invoiced included preparing affidavits for the plaintiffs.

[14]     The plaintiffs seek an order that the first defendant pay $47,400 which is 10 x the amount of $4,740 provided for under schedule 3 on a 3C basis.  The plaintiffs rely upon r 14.6 which empowers the Court to order increased costs if, inter alia:

(a)The nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under B and C.

[15]     In my view this is a case in which the Court would be entitled to order increased costs and I consider that the amount of the uplift claimed is not unreasonable.  Obviously it does not exceed the amount of costs actually charged.  I

therefore make the order which the plaintiffs seek.

J.P. Doogue

Associate Judge