Body Corporate 325261 v McDonough

[2015] NZHC 764

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-8000 [2015] NZHC 764

IN THE MATTER

of C-Vu Apartments

BETWEEN

BODY CORPORATE 325261
First Plaintiff

RW COOKE and AMANDA JANE PENDRY;

Second Plaintiffs

Second Plaintiffs continued over

AND

J MCDONOUGH First Defendant

MAUNGA REI NZ LIMITED Second Defendant

Defendants continued over

Hearing:

30 and 31 March and 1 April 2015

Counsel:

S Mills QC and B O'Callahan for applicants, sixth and seventh defendants

GJ Kohler QC and C Baker for respondents, first and second plaintiffs

Judgment:

20 April 2015

JUDGMENT OF FAIRE J

This judgment was delivered by me on 20 April 2015 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Price Baker Berridge, Auckland

Carter Kirkland Morrison, Auckland

Body Corporate 325261 v McDonough [2015] NZHC 764 [20 April 2015]

Second plaintiffs continued

DEE HELENA HOLDAWAY; KENNETH

ALAN FISH; JANE BELINDA HARRISON and FRED BOYD HARRISON; STEPHEN LORD LANSLEY as assignee of Wei Ren; HOUSING NEW ZEALAND LIMITED; TERRY CHRISTOPHER PARKIN, MAUREEN PARKIN and GEOFFREY PHILIP DALZELL; KNUTSFORD ENTERPRISES LIMITED; GOSTO BLAGOJEVIC and GORDANA BLAGOJEVIC; DAN LING YI and ZHI WEN SU; ARKADI KARETNIKOVA and OLGA KARETNIKOVA; TRF PROPERTY LIMITED; RODNEY PAUL

CLARKE, DAVID MARK SERVILLE and CHRISTENE ANN SERVILLE; FRANCOIS FUCHON and SEGUIN EPOUSC FUCHON-ROSINE; DEVINE INVETMENTS LIMITED; JEAN PALLARDY and CLAIRE HOON PALLARDY; RACHEL ANNE DAVEY and LEE DEREK ROBINSON; WELLPARK TRUSTEES NO 4

LIMITED; E-PROJECTS LIMITED; ASTRO ONE LIMITED; IRINA I; WEIDONG WU and XUEMEI WANG; RONG HU and LIXIN ZHUANG; MOUNSEY INVESTMENTS LIMITED; LINFIT PROPERTIES LIMITED; VIVIENNE WENYU LIAO and FENG ZHOU; JANINE MARGARET CARSON; TAI-YONG JANG and GEE JAE HAN; BEN HARDING HOLDINGS LIMITED; PRAMJIT RAI SUCHDEV and

JASWANT KAUR SUCHDEV; CRAIG LLOYD KENNETH TRIGG; XIAOLIN CHEN; BRANDENBURG HOLDINGS LIMITED; DAWN MARGARET MUNCASTER-WRIGHT; CAROL ANN MARGARET MORRIS; DAPHNE MAY COPLAND; KUM FATT NG and CHEW HOON NG; ROSHAN ALI; HINEMATAU NAOMI McNEILL; FUTURE

PROPERTY INVESTMENTS LIMITED; GONGQI LI; CHONGYAN ZHAO; ELIANE BOYADJIAN ROMANO; YUEN

TING ZOE LI; TAHI VENTURES LIMITED;  MYUNG SOOK CHOI and BO RAM LIM; AMBRYM PING XU; NICOLA ADEHL WALSH; JOHN

MORGAN BOND, CHERYL LORRAINE BOND AND RL TRUSTEES 1327

LIMITED; AMEETA DEVI CHAND; MARLENE LU; K & E LIMITED; RAYMOND JOHN KEY and BARBARA JOY KEY; KELEKOVIO LAULU TOVIA and RAURUINA CHRISTINE TOVIA; INDERBEER KAUR GILL; PETER GORDON DONS and GARY CHI-WAH CHEUNG; JAEWOO JUNG and GEE KYUNG HAN; THE NZ GUARDIAN TRUST COMPANY LIMITED; MR

SOON MOK HONG; KARUNAGARAN NAICKER; JULIAN BRYAN SPONDRE; PETER BAIRD HAY, ROBIN DWIGHT ADAM and ANNE ELIZABETH HINTON; PUI LIN LAI; SHANE RAYMOND CARTER; FATEMEH FERESHTEH BOSTANIAN LOBIE; SHESMI PROPERTIES LIMITED; ALAN KEITH TEMPLE; JOHN EDWARD HECTOR BULLOCK; VICTORIA MARIA MUNIZ SAAVEDRA; PING-HO WANG; MICHAEL HOWARD SMITH; JUNE GRAHAM; CAROLYN ANN WARBURTON; ANTHONY GILBERT DOUGLASS and KATHERINE ELIZABETH PEZET; RICHARD

OLIVER NICOL and DEBORAH SUTHERLAND NICOL; PAUL LINDSAY RITCHIE and MARK MAXTON THOMSON; JUN ZHU; ROHITESH PERMAL REDDY; RAPHAEL LAURIE THERKLESON; HUALIGAN INVESTMENTS LIMITED; CHUAN CHUAN CHU; HENG-YIEW WONG; MARY-JANE RICHARDS and ISLAY JEAN HAYES; BRIAN MARTIN HARVEY; SHAN LU and NING LU; IAN CRESSY WELLS; SESH PROPERTY LIMITED; PP & A HOLDINGS

LIMITED; WILLIAM CUTHERS; JOHN MICHAEL REID and MONIKA BLAIR; CURO LIMITED; DINO DEAN CURO; CHRISTINE JOY PAORA; SULOCHANA ANJALI CHAND; PRISCILLA QIAO;

CLAYTON WASTNEY and KAREN JANE ARGYLE and RQ INVESTMENTS LIMITED

Second Plaintiffs

Defendants and Third Parties continued

AUCKLAND COUNCIL

Third Defendant

ANDGARY BICKERTON Fourth Defendant

ANDRACHEL VENABLES Fifth Defendant

ANDSTEPHEN MITCHELL ENGINEERS LIMITED

Sixth Defendant

ANDSTEPHEN ROBERT MITCHELL Seventh Defendant

ANDMACDONALD BARNETT PARTNERS LIMITED

Eighth Defendant

ANDMICHAEL SIMPSON Ninth Defendant

ANDGARRY JOHN SCARBOROUGH First Third party

ANDROSS DUXFIELD Second Third Party

ANDFRAMERITE INSTALLATIONS LIMITED

Third Third Party

ANDJAMIE SIMON HUTCHENS Fourth Third Party

ANDGARY PAUL GORDON Fifth Third Party

ANDROBERT ARTHUR CAMPTON Sixth Third Party

Contents

Introduction ............................................................................................................[1] Background ............................................................................................................[9] First application: application for determination of questions before trial ............[16]

First question  [19]

Second question  [14]

In the alternative to the first preliminary questions, an order striking out paragraphs 49, 50 and 51, and 57, 58 and 59 of the 11th amended statement

of claim.................................................................................................................[39]

Application for parts of the 11th amended statement of claim to be struck out because those parts introduce new causes of action which are statute barred .....[55]

Application for particulars for a more explicit pleading ......................................[76] The application that the plaintiffs answer interrogatories ....................................[87] Result..................................................................................................................... [97

Costs .....................................................................................................................[98]

Introduction

[1]      The  first  plaintiff  is  a  body  corporate  of  C-Vu  Apartments  (C-Vu),  a development complex with 130 unit titles situated on the corner of Hopetoun and Day Streets, Auckland.   The second plaintiffs are past and present proprietors of units at C-Vu.

[2]      The  present  case  concerns  two  applications  by  the  sixth  and  seventh defendants.   The sixth defendant is Stephen Mitchell Engineers Ltd (SML), an engineering company in Auckland. The seventh defendant is Mr Stephen Mitchell.

[3]      The applications were filed on 9 February 2015. The first application seeks:

(a)       An order that certain questions be determined separately and prior to trial; and

(b)In  the  alternative,  that  specific  parts  of  the  eleventh  amended statement of claim be struck out.

[4]      The second application seeks:

(a)	An order that the plaintiffs answer interrogatories set out in a notice dated 5 January 2015; and
(b)	An  order  that  plaintiffs  file  a  more  explicit  pleading,  or  provide further particulars of the 11th amended statement of claim as requested
in a notice dated 2 February 2015.
[5]	On	20  February  2015  I  gave  directions  for  the  hearing  of  the  two

applications, which included orders extending time for the filing and service of notices of opposition and affidavits, and for reply affidavits.

[6]      The same day the defendants filed a third application not covered by my directions. The application seeks an order striking out parts of the 11th  amended statement of claim. The parts covered by the application relate to defects nine and

16, which deal with underground piles and Dycore seating respectively. The strike- out application alleges that the parts of the 11th  amended statement of claim that relate to these defects are new causes of action and are statute barred.  It is a discrete application and unrelated to the strike-out application referred to in the first application above.  Despite the fact that I did not deal with the matter on 20 February

2015, counsel were agreed that it should be dealt with in this judgment and that it should be subject to the directions that were made on 20 February 2015.  On that basis, the application is considered in this judgment, although I record that it did have some effect on the hearing time which was reserved for the disposal of these applications.

[7]      I record that the three applications were filed after the close of pleadings date. The plaintiffs have not taken issue with the lack of leave for such applications as required by r 7.7 of the High Court Rules, save to draw attention to the need for the trial to proceed on the scheduled date of 20 July 2015.

[8]      Submissions were advanced on the basis that the applications required the determination of five matters.   I will follow the approach counsel have adopted, which necessarily requires separate analysis of the five matters.

Background

[9]      The proceeding was initially commenced as a leaky building claim, although claims relating to structural and seismic issues were subsequently added.  Prior to a settlement, which I shall later refer to, there were nine defendants and seven third parties.

[10]     A 10 week trial was allocated to commence on 14 July 2014.  Shortly before it was due to commence, the plaintiffs settled with all defendants, save for SML and Mr Mitchell.  The plaintiffs allege that SML’s and Mr Mitchell’s failings contributed to  weather-tightness  defects  in  the  building  and  additionally  that  SML  and Mr Mitchell are primarily liable for certain structural seismic defects.

[11]     The plaintiffs sought leave to file the 10th amended statement of claim.  That was addressed in a judgment delivered by Katz J on 29 July 2014.1   The application was granted except for certain paragraphs referred to in the judgment.

[12]     The defendants in the present case sought an adjournment of the trial, which had been delayed by some three weeks as a result of the settlement.  That application was granted by Katz J on 4 August 2014, when a new trial date for 20 July 2015 was allocated.

[13]     The defendants next applied to strike out parts of the 10th amended statement of claim.  That application was heard on 25 and 26 August 2014 and resulted in a

further judgment by Katz J on 23 September 2014.2   The judgment required a further amended statement of claim to be filed and served, and set a time for the filing and service of a statement of defence to it.  The judgment also adjusted the time for the service of briefs of evidence.    It  required  the  plaintiffs’ briefs  to  be served  by

20 February 2015, the defendants’ briefs by 27 March 2015, and replies by 17 April

2015.  It fixed a new close of pleadings date of 19 December 2014.

[14]     A conference was called before me on 20 February 2015, which I have earlier referred to.   It established new times for the service of briefs of evidence, namely that the plaintiffs were to be served by 27 March 2015, the defendants’ by 4 May

2015, and replies, if appropriate, by 25 May 2015.  No alteration was made to the close of pleading date of 19 December 2014.

[15]     I now consider each matter raised by the applications.

First application: application for determination of questions before trial

[16]     Mr Mills amended the application so that it was limited to the following two specific questions:

(a)       Whether the Auckland Council has the power to require any seismic remediation of the C-Vu building, or any part of the building, either on an application by the plaintiffs for a building consent to carry out the “Aitken Scope of Works” referred to in paragraph 29(a) of the

11th amended statement of claim or otherwise, if neither the building nor  any  part  of  the  building  is  earthquake-prone  as  defined  in

sections 122(1) of the Building Act 2004 and Regulation 7 of the

Building (Specified Systems, Change the Use, and Earthquake-Prone

Buildings) Regulations 2005.

Alternatively, in the event that the C-Vu building or any part of the building  is  earthquake-prone,  whether  the Auckland  Council  has power, either on an application by the plaintiffs to carry out the Aitken Scope of Works or otherwise, to require any seismic remediation  of  the  C-Vu  building,  or  any  part  of  the  building, beyond the level of seismic performance at which the building is no longer an earthquake-prone building;

(b)       In respect of the “upper floor diaphragm strengthening” referred to in Schedule C to the 11th statement of claim, for which remediation costs of $707,200.00 plus “Architectural Extras” of $738,000,00 are claimed in order to bring the building to “34% NBS”:

Whether at the time the C-Vu building was designed, consented and built it was a breach of any duty of care owed by SML to the plaintiffs to have relied on “664 mesh” as a means of transferring the required seismic loads from the “upper floor diaphragms” of the building.

[17]     The application is made in reliance on r 10.15 of the High Court Rules, which provides:

10.15   Orders for decision

The  court  may,  whether  or  not  the  decision  will  dispose  of  the proceeding, make orders for—

(a)  the decision of any question separately from any other question, before, at, or after any trial or further trial in the proceeding; and

(b) the  formulation  of  the  question  for  decision  and,  if  thought necessary, the statement of a case.

[18]     I first address the need for determination of a question before trial in respect of the first question, as it is presented in two alternative forms.

First question

[19]     The formulation of the question arises out of the wording of the plaintiffs’

11th amended statement of claim:

50.      … Notwithstanding that in the course of attending to the necessary remedial works to remedy the defects for which SM Engineers is liable in law,  the  Plaintiffs  will  need  to,  and Auckland  City  will  require  the Plaintiffs to include as part of their Remedial Works, the work necessary to address all the defects set out in paragraph 27.

(Emphasis added)

[20]     The primary contention for the defendants is that the Auckland City Council (the Council) cannot require the plaintiffs to carry out remedial works if the building is not earthquake prone, or in the case that the building is indeed earthquake prone, the Council cannot require the plaintiffs to repair the building beyond the minimum standard of 34% of the new building standard (NBS).

[21]     The  issue  is  rooted  in  the  broader  question  of  the  kind  of  damages  the plaintiffs are entitled to. The plaintiffs contend  they will demonstrate at trial that the building is earthquake prone, and if it were designed and built in accordance with the

Building Code, the Concrete Code and the Loadings Code, the building would have been built to a standard in excess of 100% NBS.

[22]     Mr Kohler for the plaintiffs says that the issue to be determined at trial is whether the defendants breached their obligations. Mr Kohler says the plaintiffs are simply seeking a remedy that puts them in the position they would have been in had the breach  not  occurred. That  is,  a building  fully compliant  with  contemporary standards (2002—2004). To the extent that the building can be repaired, the plaintiffs are entitled to the costs of such repairs, and to the extent that repairs cannot be done, the plaintiffs are entitled to damages for diminution in value

[23]     Mr Mills for the defendants submits that the first proposed question concerns an issue of law. The primary reason for which the defendants advance the first question in either form is the decision of the Supreme Court in University of Canterbury v Insurance Council of New Zealand Inc.3

[24] That case involved an application for judicial review of a city council policy on the ground that the council had exceeded its statutory authority. Section 122 of the Building Act 2004 (the “Act”) defines an earthquake-prone building. That is referred to in the Supreme Court decision in an abbreviated form as being whether the building meets the 34% NBS benchmark in a moderate earthquake and whether it is likely to collapse in a moderate earthquake. The Supreme Court granted a declaration that in the case of an earthquake-prone building, the Christchurch City Council cannot issue a notice under s 124 of the Act to the owner to take steps to increase the seismic strength of the building beyond 34% NBS.

[25]     The defendants submit that as a result of the Supreme Court decision there is no basis in law for pleading that the building is “required” to have the alleged seismic deficiencies remedied “to code” or to “67% NBS” as is pleaded. Mr Mills, in his submissions, advanced the proposition that the claim for an award of remediation damages beyond 34% NBS is “not reasonably arguable because the pleaded facts fall well outside the circumstances in which the court should order damages for the cost

of repair”.

3      University of Canterbury v Insurance Council of New Zealand Inc [2015] 1 NZLR 261 (SC).

[26]     Mr Mills further submitted that I should strike out the claim for remediation damages, other than in respect of the allegation that the building is earthquake-prone. In making that submission, he referred me to the affidavit of Mr Jacobs, a structural engineer for the defendants, where he expressed the view that:

If the Auckland Council has no power to require the C-Vu building to be remediated to address the alleged seismic defects, other than to the extent that the building or any part of the building is earthquake prone this would very significantly simplify and narrow:

(a)       The investigations and modelling that have been undertaken and which will need to be continued in preparation for the new trial date.

(b)       The areas of disagreement between the experts.

(c)       The length and complexity of the trial evidence from the structural engineers.

(d)       The costs of remediating, if any parts of the building are earthquake prone.

(e)       Because any required remediation would be much simpler and less intrusive it would also very significantly affect the disruption caused to the continued use of the building while any remedial works are being undertaken.

[27]     The plaintiffs oppose the application on the grounds that determining the proposed questions will not resolve anything of significance in this particular case or have any significant effect on duration of the trial, but that granting the application would put in jeopardy the trial commencement date for the third time.

[28]     The underlying purpose of r 10.15 is to expedite proceedings by limiting or defining the scope of the trial in advance or obviating the need for a trial altogether.4

The starting point is the assumption that all matters in issue are to be determined in one trial because that will normally be the most expeditious and efficient manner of dealing with the proceeding.5

[29]     Rule 10.15 has a two-step approach. The first step is to determine what the question is. The second step is to determine whether it is appropriate to have it

determined before trial.

4      Innes v Ewing (1986) 4 PRNZ 10 (HC) at 18.

5      McGechan on Procedure at [10.15.05.(1)] citing Turners & Growers Ltd v Zespri Group Ltd at

[10].

[30]     The burden, which is not insignificant, lies on the applicant. The approach under r 10.15 is to consider whether the applicant has established good, preponderant reasons in favour of a separate question determination.6  A practical approach to determining whether the applicant has established sufficient reasons was taken in Haden v Attorney-General7 and adopted in Karam v Fairfax NZ Ltd:8

(a)       Will  there  be  difficult  demarcation  between  those  issues  to  be addressed at the first trial and those left for the second?

(b)      Will the proceedings be brought to an end?

(c)      What potential time saving does the separate question offer? (d)       How will appeals be dealt with?

(e)      Are  there  any  other  practical  considerations  tending  one  way  or another?

[31]     I consider that there is no advantage to determining the proposed question before trial. The question proposed by the defendants asks the court to inquire into the powers of the Council both in the event that the building is earthquake prone, and in the case that it is not earthquake prone. There is presently a split view among the expert witnesses as to whether the building is in fact earthquake prone. That is a matter  that  will  ultimately  be  resolved  at  trial  with  reference  to  all  available evidence. However, without a determinative view on this issue, any answer to the defendants’  proposed  question  will  be  purely  hypothetical.  Furthermore,  the proposed question goes to the kind of remedy the plaintiffs may seek. That is also a question that should be determined at trial in light of all available evidence.

[32]     I set out the answers to the questions in Haden and Karam as they apply in this case:

6      Karam v Fairfax NZ Ltd at [58(d)].

7      Haden v Attorney-General HC Wellington CIV-2010-485-2380, 4 November 2011 at [50]—[67].

8      Karam at [60]—[89].

(a)      Will  there  be  difficult  demarcation  between  those  issues  to  be addressed at the first trial and those to be addressed at the second? There are likely to be significant demarcation difficulties. It would be difficult for the plaintiffs’ experts to demarcate between issues which are to be addressed at the first trial, that is in answer to the question posed, and those issues left for the second trial. It is likely that the plaintiffs would call the same evidence whatever answer the court gave to the question posed.

(b)       Will the proceedings be brought to an end? The short answer is no.

The question proposed by the defendants highlights only one of many issues in the present case.

(c)      What potential time saving does the separate question offer? The defendants did not offer any submissions on this point. However, it seems unlikely that any time will be saved if the first question is determined separately. The trial date had been fixed.  The plaintiffs’ briefs have, by and large, been served, accordingly the order sought by the defendants would almost certainly delay determination of the case. There will be a need to recall the same witnesses for the second hearing. Inevitably, there will be a duplication of time spent in the Court and on counsel “coming up to speed” again for the second trial. Determining the question now could create the need for a second round  of  discovery,  other  interlocutory applications,  and  amended pleadings following the first trial. There is also the risk of having multiple appeals. Lastly, given the small amount of demarcation between the proposed question and the remaining issues, there may be timetabling difficulties to find a judge who can hear both the first and second trials.

(d)How will appeals be dealt with? Splitting the trial will create the possibility  of  each  being  appealed  separately.  Because  the  issues raised by the proposed question are intertwined with the other issues

of the case, it will be difficult for an appeals court to decide on one without hearing the other.

(e)      Are there any other practical considerations? There may be issues of judicial recusal if the Judge in the first trial makes suggestions for the outcome of the second trial. Also, given the fact that evidence will likely be the same for both trials, the first trial may have to make findings on the evidence that is intended for the second trial.

[33]     The application is therefore denied in respect of determining the first question in both its forms, as posed by the defendants.

Second question

[34]     The second question requires a determination of whether the defendants were negligent to specify the use of 665 mesh in 2002 when the building was designed and consented.

[35]     Mr Mills says in his submissions that 665 mesh was placed over the pre-cast concrete floors,  and  then had  concrete poured  over it.  It  has  been  used  by the defendants in the design of the building to transfer earthquake forces from the floor diaphragms into the vertical elements of the building and then into the ground.

[36]     There is, in the affidavit evidence presented by both the defendants and the plaintiffs,  a  clear  difference  of  view  between  the  engineers  on  whether  the defendants were negligent in specifying the use of 665 mesh.  In his reply affidavit Mr Jacobs expressed the view that if the court determines that the defendants were not negligent, that would dispose of all major issues concerning the defendants’ liability for the building being earthquake-prone, if indeed it is.

[37]     The same arguments as for the first proposed question were rehearsed in respect of the second proposed question. For the same reasons as above, I am not satisfied that sending this second question off to a pre-trial trial hearing for determination at this stage of the life of this case would result in any significant benefit to the parties. The plaintiffs’ evidence in brief form has been exchanged. The

issue is ready to be determined at trial. Determining the second proposed question only runs the risk of delaying the trial even further than it has already been delayed.

[38]     I conclude, therefore, the proper course is to deny this application so that the matter can proceed with the trial scheduled for 20 July 2015.

In the alternative to the first preliminary questions, an order striking out paragraphs 49, 50 and 51, and 57, 58 and 59 of the 11th  amended statement of claim

[39]     Paragraphs 49, 50 and 51 plead that as a result of SML’s breaches of duty, the plaintiffs are required to undertake remedial works to address the defect specified in the 11th  amended statement of claim and are also required to do so by the Council. Paragraph 51 specifies the losses suffered as a result of SML’s alleged breaches.

[40]     Paragraphs 57, 58 and 59 make the same pleadings and specify the same losses in relation to Mr Mitchell.

[41]     In both sets of pleadings, the plaintiffs specify the amount of loss that has been and will be suffered if the building is fixed to comply with the Building Code, and a separate amount of loss that has been and will be suffered if the building is fixed to comply with 67% NBS.

[42]     The defendants seek to strike out wording which includes the word “require”

as it is used in paragraphs 49, 50, 57 and 58:

[49] and [57] … the Plaintiffs are required to undertake the Remedial Works as above and are required to undertake further remedial works to remedy the other faults, including the structural seismic deficiencies.

[50]and [58] … the Plaintiffs will need to, and Auckland City will require the Plaintiffs to include as part of their Remedial Works, the work necessary to address all the defects set out in paragraph 27.

[43]     The defendants seek to strike out these paragraphs on the basis that they are untenable in light of the Supreme Court’s decision in University of Canterbury. Specifically, the defendants say there is no basis in law for pleading that a building is “required” to have the alleged seismic deficiencies remediated to comply with the Building Code or with 67% NBS. Again, the broader issue in play is the kind of

remedy the plaintiffs will be entitled to if successful at trial, namely an award in the amount of diminution in value or cost of repairs to bring the building up to a certain percentage of NBS, or both.

[44]     This part of the application is made in reliance on r 15.1 of the High Court

Rules, which provides:

15.1     Dismissing or staying all or part of 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)      is likely to cause prejudice or delay; or

(c)      is frivolous or vexatious; or

(d)      is otherwise an abuse of the process of the court.

[45]     The criteria for striking out a pleading is summarised by the Court of Appeal in Attorney-General v Prince and Gardner.9    In Couch v Attorney-General the Supreme Court endorsed those principles, which briefly summarised are:10

(a)       The pleaded facts are assumed to be true;

(b)The cause of action must be clearly untenable.   The court must be certain that it cannot succeed;

(c)       The jurisdiction is to be exercised sparingly;

(d)      The court can decide difficult questions of law;

(e)       The  court  should  be  particularly  slow  to  strike  out  cases  when developing areas of the law which need to be based on proven rather

than hypothetical facts.

9      Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA).

10     Couch v Attorney-General [2008] NZSC 45 at [33].

[46]     Where a strike-out application will not completely dispose of a case it should not be pursued.11  If the pleading is capable of amendment, or “effective repair”, as described by Tipping J in Marshall Futures Ltd v Marshall,12 the Court will almost always allow an amendment to be made in preference to striking out the pleading.

[47]     Partial strike-outs are rare and are generally discouraged, unless the case is plain and obvious.13 Where the case is not plain and obvious, a careful assessment is required as to whether the time and expense of such an application will, overall, be a compellingly efficient use of the resources of all involved.14

[48]     The defendants do not clarify which head of r 15.1(1) they rely on to describe the plaintiffs’ pleadings as “untenable”. For present purposes it will be assumed to be r 15.1(1)(a).

[49] There was considerable discussion between myself and counsel as to whether the strike out was simply limited to the removal of the words that “the Auckland Council required” as they appear in the paragraphs concerned. Mr Kohler responded by submitting that the plaintiffs’ case does not just rest on what “Auckland Council can require them to do, or do itself, pursuant to s 124 of the Building Act 2004”. He made it plain that what was intended was not an allegation that the plaintiffs would be forced by Council pursuant to a notice under s 124 to do certain works in the reinstatement of the building. Further, he said, the reason for what is pleaded is what is required to put the building into the state it should have been in when it was first built.

[50] Mr Kohler further submitted that, in the course of carrying out the works required to remedy the building, and in the course of obtaining a compliance certificate, the Council will likely require the building defects to be addressed and will require work to be completed in accordance with the requirements of the Building Code. That, he submitted, was quite independent of any notice under s 124

of the Act.

11     Applefields Ltd v NZ Apple & Pear Marketing Board, HC Wellington CP335/94, 21 April 1994.

12     Marshall Futures Ltd v Marshall [1992] 1 NZLR 316.

13     ANZ Bank New Zealand Ltd v Frost and Sutcliffe at [2014] NZHC 245 [25].

14     McGechan on Procedure, above n 5, at [15.1.07(3)].

[51] Mr Kohler further submitted that when addressing the question of whether the building is earthquake-prone, the plaintiffs’ engineering evidence is that the identified defects need to be addressed in the course of getting the building to a state in excess of 34% NBS so that it will not be earthquake-prone. Finally, he made reference to the Building (Earthquake-Prone Buildings) Amendment Bill 2013 which may amend s 124 in the near future. The Bill has passed the first reading in Parliament and is presently before the Select Committee, with a report due on 30

July 2015.

[52] There is no doubt, in light of the Supreme Court decision, that the Council may not exercise its powers under s 124 to “require” the plaintiffs to carry out works that would make the building more than 34% NBS. However, that does not mean the Council may not require the plaintiffs to remedy the identified defects pursuant to some other statutory authority. In the very least, the defendants have not pointed to any other authority under which the Council does not have the power to require the works to comply with the Building Code. It follows that the defendants have not shown that the plaintiffs’ argument that the Council will require remedial works to address the identified defects is untenable.

[53]     There are also other reasons not to allow the  strike-out application. The application to strike out the specified words from the 11th  amended statement of claim would not dispose of the whole proceeding, nor narrow any of the issues. The defendants’ contention is aimed at reducing the scope of remedies available to the plaintiffs. That itself is an issue that ought to be determined at trial. Lastly, in light of the recent decision of the Supreme Court and the Bill presently before the Select Committee, the present case may present some developing areas of law, which ought to make the Court slow to strike out the specified parts of the pleading.

[54]     Accordingly, the first application is declined.

Application for parts of the 11th  amended statement of claim to be struck out because those parts introduce new causes of action which are statute barred

[55]     The defendants allege that two defects were pleaded for the first time in the

10th  amended statement of claim dated 18 November 2014.  They are referred to in

paragraph 27 of the 11th  amended statement of claim which pleads particulars of defects relevant to the defendants.   The two defects the subject of the defendants’ application are defects nine and 16.

[56]     Defect 9 pleads:

Defect 9.         A significant  number  of  columns  at  all  levels  including below ground have insufficient confinement reinforcement: Building Code B1.3.1,  B1.3.2,  B1.3.3  and  B1.3.4  and  NZS3101:  Part  1:1995  +  Amt.

1:(1998) + Amt. 2:(1999), clause 8.4.7.2(a)

[57]     Defect 16 pleads:

Defect 16.        The precast Dycore floor units have insufficient seating at the walls: Building code B1.3.1, B1.3.2, B1.3.3 and B1.3.4.

[58] The defendants allege that the two defects are a new cause of action and are statute barred by the operation of the ten-year long stop provision in s 393 of the Building Act 2004. They say that the defects should be struck out on the grounds that they are frivolous, vexatious or an abuse of process.

[59] The defendants contend that the latest date of any act or omission against them in respect of the underground piles (the columns) and the Dycore seating is, at the latest, 9 June 2004, which the date of the Code Compliance Certificate. There is no dispute that the defects were introduced in the 10th amended statement of claim on 18 November 2014, and that accordingly s 393 applies. The only question is whether the introduced defects form a new cause of action.

[60]     The plaintiffs dispute that the defects created a new cause of action for the following reasons:

(a)      Defects 9 and 16 are particulars of the defects referred to in paragraph

27 of the 11th amended statement of claim;

(b)The defects allege breaches of the Building Code which amount to non-compliance with NZS4203:1992, NZS3101:1995 and NZS3404:1997;

(c)      There is one cause of action only alleged against SML, which is replicated against Mr Mitchell.   The cause of  action is  set out in paragraphs 47 to 49 in relation to SML and paragraphs 55 to 57 in relation to Mr Mitchell in the 11th  amended statement of claim.  The cause of action asserts:

(i)That  SML  owed  the  plaintiffs  a  duty  of  care  to  exercise reasonable  skill  and  care  in  the  way  set  out  in  paragraph

47(a)–(d); and

(ii)That it breached its  duty of care in the ways  identified in paragraph 48(a)–(c);

(iii)That as a consequence the plaintiffs suffered loss as set out in paragraph 49;

(d)      Corresponding provisions relate to Mr Mitchell in paragraphs 55 to

57.

[61]     Mr Kohler drew attention to the fact that the particulars are not pleaded as independent causes of action.

[62]     The starting point for this analysis is r 7.77, which provides:

7.77     Filing of amended pleading

(1)       A party may before trial file an amended pleading and serve a copy of it on the other party or parties.

(2)       An   amended   pleading   may   introduce,   as   an   alternative   or otherwise,—

(a)      [relief in respect of] a fresh cause of action, which is not statute barred; or

(b)      a fresh ground of defence.

(3)       An amended pleading may introduce a fresh cause of action whether or not that cause of action has arisen since the filing of the statement of claim.

(4)       If a cause of action has arisen since the filing of the statement of claim, it may be added only by leave of the court. If leave is granted, the amended pleading must be treated, for the purposes of the law of limitation defences, as having been [filed] on the date of the filing of the application for leave to introduce that cause of action.

(5)       Subclause (4) overrides subclause (1).

(6)       If an amended pleading introduces a fresh cause of action, the other party must file and serve that party's defence to it within 10 working days after the day on which the amended pleading is actually served on the other party.

(7)       When an amended pleading does not introduce a fresh cause of action, the other party may, within 5 working days after the day on which the amended pleading is served on that other party, file and serve an amended defence to it.

(8)       If an amended pleading has been filed under this rule, the party filing the amended pleading must bear all the costs of and occasioned by the original pleading and any application for amendment, unless the court otherwise orders.

(9)       This rule does not limit the powers conferred on the court by rule

1.9.

(10)      This rule is subject to rule 7.7 (which prohibits steps after the close of pleadings date without leave).

[63]     Cause of action is not defined in the High Court Rules.  I must therefore turn to the case law.

[64]     In Commerce Commission v Visy Board Pty Ltd the Court of Appeal said:15

The applicable principles to  determine  whether  an amendment  creates a fresh cause of action are summarised by this Court in  Transpower New Zealand Ltd v Todd Energy Ltd:16

“(a)     A cause of action is a factual situation the existence of which entitles one person to obtain a legal remedy against another (Letang v Cooper [1965] 1 QB 232at 242 — 243 (CA) per Diplock LJ);

(b)       Only material facts are taken into account and the selection of those facts ‘is made at the highest level of abstraction’ (Paragon Finance plc v D B Thakerar & Co (a firm) [1999]

1 All ER 400at 405 (CA) per Millett LJ);

15     Commerce Commission v Visy Board Pty Ltd [2012] NZCA 383 at [141].

16    Transpower New Zealand Ltd v Todd Energy Ltd [2007] NZCA 302 at [61] (referring to The

Ophthalmological Society  of  New  Zealand  Inc  v  The  Commerce Commission CA168/01, 26

September 2001 at [22]—[24]) at [93]. Leave to appeal refused: Transpower New Zealand Ltd v

Todd Energy Ltd [2007] NZSC 106.

(c)       The  test  of  whether  an  amended  pleading  is  ‘fresh’  is whether  it  is  something  ‘essentially  different’ (Chilcott  v Goss [1995] 1 NZLR 263at 273 (CA) citing Smith v Wilkins

& Davies Construction Co Ltd [1958] NZLR 958at 961 (SC)

per  McCarthy  J).  Whether  there  is  such  a  change  is  a question of degree. The change in character could be brought about by alterations in matters of law, or of fact, or both; and

(d)       A  plaintiff  will  not  be  permitted,  after  the  period  of limitations has run, to set up a new case ‘varying so substantially’ from the previous pleadings that it would involve  investigation of factual or legal  matters, or  both,

‘different from what have already been raised and of which no fair warning has been given’ (Chilcott at 273 noting that

this test from Harris v Raggatt [1965] VR 779at 785 (SC)

per Sholl J was adopted in Gabites v Australasian T & G Mutual Life Assurance Society Ltd [1968] NZLR 1145 at

1151 ).”

[65]     Mr  Mills  referred  to  two  cases  in  support  of  his  proposition  that  the amendments in this case amounted to the introduction of a new cause of action.

[66]     In the first case, Frew v Webb Farry, proceedings had been issued by the plaintiffs against solicitors and another party.17    The proceeding claimed that both had been negligent, in breach of contract and fiduciary duty in relation to certain loan advances which had been made to a third party.  The original proceeding alleged that the defendants had failed to obtain personal guarantees from the third party’s directors or shareholders at the time of the advance. An amended statement of claim

filed in August 2000 alleged a further and new failure, namely that personal guarantees were not obtained when the plaintiffs were asked to sign deeds of priority. The court found that the proposed amendments were completely fresh allegations dealing with two novel factual situations.

[67]     That case, however, is distinguishable from the present because, unlike the present case, the basis for the claims arose at two different times.  One can readily understand why the allegation in the amended statement of claim was treated as a

new cause of action in those circumstances.

17    Frew v Webb Farry (2000) 6 NZBLC 103,165.

[68]     The second case referred to by Mr Mills is The Ophthalmological Society of New Zealand Inc v The Commerce Commission.18   In that case, the plaintiffs alleged a   breach   of   s 27   of   the   Commerce   Act   1986   by   the   Society   and   five Ophthalmologists.  The original statement of claim pleaded that the relevant market, for the purposes of the claim, was the market for supply of routine cataract surgery in Southland.  The amended statement of claim, which was the subject of the leave

application by the plaintiffs, alleged that the relevant market was the market for supply by ophthalmologists of routine ophthalmological procedures in New Zealand generally.  The court concluded that:19

In  view  of  the  importance  in  competition  law  of  the  evaluation  of  the relevant market structure, we consider that a change to the pleading of the market from one pertaining to the region of Southland only to the national market creates a “new case” in the sense in which those words were used by Sholl J.

On that basis, the court concluded that it was not appropriate to grant leave to the plaintiffs to file and serve the amended statement of claim.

[69]     Further helpful assistance is to be found in the Court of Appeal judgment

Commerce Commission v Visy Board Pty Ltd where the Court said:20

[142]    The question is therefore whether the amendment to the pleadings changes the claim against the defendant so that it is something essentially  different  from  what  it  was  before  the  amendment. A change of that nature can, as is clear from paragraph (c) of the passage from Transpower above, occur as a result of an alteration in matters of fact. In determining whether a particular factual amendment has the effect of inserting a new cause of action, it is helpful to  refer  to  three  cases  that  have  considered  amendments altering factual matters.

[143]    The first is Smith v Wilkins and Davies Construction Co Ltd, referred to in paragraph (c) of the summary above. In that case, the plaintiff filed proceedings against his employer in negligence after suffering injuries from a workplace accident. The relevant part of the original pleadings claimed that the defendant's injuries were caused or contributed to by the defendant's negligence in failing to provide a safe system of work in a number of respects. Later, the plaintiff, after the expiry of the limitation period, sought to amend that section of the statement of claim by replacing it with an allegation of failing to

18     The Ophthalmological Society of New Zealand Inc v The Commerce Commission CA168/01,

26 September 2001.

19     The Ophthalmological Society of New Zealand Inc v The Commerce Commission at [35].

20     Commerce Commission v Visy Board Pty Ltd above, n 7 at [142]–[146].

provide a safe system of work in some of the same respects pleaded earlier. But a new factual particular of breach was introduced.

[144]   McCarthy J noted that the amendment introduced:

“ … a new matter of fact which, at this stage, I must assume to  be causative  and not merely part of the narrative,  for whereas   the   allegations   discarded,   or   some   of   them, suggested  that  the  plaintiff  had  climbed  up  the  legs  of profiles  to  the  position  from  which  he  fell,  the  new allegations suggest that he was lifted there by holding on to the hook or the wires of a crane.”

The Judge did not, however, consider this “substantial alteration of the facts” to amount to the introduction of a fresh cause of action. He analysed the issue in this way:

“The issue is, I think, put as clearly as anywhere in the words of Lord Wright M.R. in Marshall v London Passenger Transport Board [1936] 3 All ER 83, as being whether the new pleading involves ‘a new departure, a new head of claim, or a new cause of action’ (ibid., 87). In other words, is it something essentially different from that which was pleaded earlier? Such a change in character may be brought about, in my view, by alterations in matters of law or of fact, or both. Alterations of fact could possibly be so vital and important as by themselves to set up a new head of claim. On the other hand, more often alterations of fact do not affect the essence of the case brought against the defendant.

…  In each case it must, I consider, be a question of degree.

The claim against the defendant here is founded on breach of the duty thrown on an employer to take reasonable care not to subject his employees to unnecessary risk. That general duty has subdivisions, one of which is the duty to provide, in appropriate cases,  a  safe  system of  work:  … Another  associated  with  it,  or perhaps a subdivision of it, is to provide proper and safe equipment to carry out the tasks set. Here, under para. 4 (a), a failure in the duty to provide a safe system is alleged. That failure is detailed in a number  of  sub-allegations.  These  subdivisions  have  now  been altered, but the main character of the substantial allegation remains. The claim is still one founded on the duty of an employer to take proper care for the safety of his servants, and it still embodies, as the branch of that particular duty relied on, the assertion that there was a failure to provide a safe system of work. It is to be observed that no alteration has been made in the facts contained in para. 3. There is admittedly an alteration in the facts behind the sub-allegations in para. 4 but that, as I see it, amounts to no more than an alteration in particulars and circumstances.”

[145]    McCarthy J thus acknowledged that, although the pleading of new facts is in theory capable of creating a fresh cause of action, it will be rare that factual matters are so vital as to affect the essence of the case brought against the defendant. McCarthy J's analysis of those factual amendments may be contrasted with his reasoning in respect

of further amendments that were made in Smith v Wilkins and Davies Construction Co Ltd, which went to the legal basis of the claims against the defendant. The plaintiff added to the statement of claim two paragraphs alleging that the defendant had committed a breach of statutory duty. That allegation, unlike the claim in negligence, was based entirely on the new facts pleaded (that is, that the plaintiff was lifted up by the crane). The Judge found that those amendments did create a new cause of action. The allegation of breach of statutory duty was completely new in both fact and law: it was new in law because breach of statutory duty is a specific common law claim that is  different  from a  claim in  negligence;  and  it  was  new  in  fact because it was based entirely on a fact that was not pleaded or even hinted at in the original statement of claim.

[146]    A similar approach has been taken in two later cases where it was argued that an amendment to a statement of claim inserting new facts amounted to the introduction of a new cause of action.   The theme running through all three cases is that in order for an amendment to amount to a new cause of action, there must be a change to the legal basis for the claim. That can, in theory, occur through the addition of new facts, but only if the facts added are so fundamental that they change the essence of the case against the defendant. If the basic legal claims made are the same, and they are simply backed up by the addition or substitution of a new fact, that is unlikely to amount to a new cause of action.

(Citations omitted)

[70]     Mr Mills submitted that, beginning with the eighth amended statement of claim, the claims against the defendants were remedial works to the loss arising out of specific alleged deficiencies in the structural design of the building.  He submitted that each alleged deficiency gave rise to a cause of action in its own right.

[71]     The particular issue to  be decided  in  this case,  however,  is  whether the addition of defects nine and 16 is something essentially different.  As the Court in Transpower recognised, whether there is such a change is a question of degree.  That has been implicitly recognised in this case, because counsel has sought support for the submission made in the affidavit evidence of the engineer, Mr Jacobs.  In short, the submission is made that with the introduction of an additional basis for the claim against the defendants, new and complicated analyses had to be carried out for the building as a whole, including complex computer modelling.   Mr Jacobs’ view is refuted  by  the  plaintiffs’  structural  engineer,  Mr Bradley.     One  is  therefore immediately faced with the task of resolving in this banco application a difference of view, or put more particularly, just how far the change takes the case.

[72]     In Matai Industries Ltd v Jensen21  Tipping J, when referring to a strike out application involving limitation defences, referred to the decision of the Court of Appeal in the United Kingdom in Ronex Properties Ltd v John Laing Construction Ltd.22   In summary his Honour observed that:

a)       A defendant could never apply to strike out a claim against him as disclosing no reasonable cause of action merely because he might have a good limitation defence;

b)A defendant who believes he has a good limitation defence may, however, either plead the defence and seek trial of the defence as a preliminary issue, or, in a clear case, apply to strike out the plaintiff’s claim on the grounds that it is frivolous, vexatious and an abuse of process;

c)        The onus is on the defendant to show that the plaintiff’s claim is

statute barred;

d)       Evidence can be tendered by affidavit; and

e)       The Court should be slow to strike out a claim or cause of action altogether in limine, but, if the position is quite clear, the defendant should not be vexed by having to go to full trial when the answer is obvious and inevitable.

[73]     This approach was approved by Tipping J in the Supreme Court in Murray v

Morel & Co Ltd where he said:23

[33]      I consider the proper approach, based essentially on Matai, is that in order to succeed in striking out a cause of action as statute-barred, the defendant must satisfy the Court that the plaintiff’s cause of action is so clearly statute-barred that the plaintiff’s claim can properly be regarded as frivolous, vexatious or an abuse of process. If the defendant demonstrates that the plaintiff’s proceeding was commenced  after  the  period  allowed  for  the  particular  cause  of

21     Matai Industries Ltd v Jensen [1989] 1 NZLR 525 (HC).

22     Ronex Properties Ltd v John Laing Construction Ltd [1982] 3 All ER 961.

23     Murray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721 at [33] – [34].

action by the Limitation Act, the defendant will be entitled to an order striking out that cause of action unless the plaintiff shows that there is an arguable case for an extension or postponement which would bring the claim back within time.

[34]      In the end the Judge must assess whether, in such a case, the plaintiff has presented enough by way of pleadings and particulars (and evidence, if the plaintiff elects to produce evidence), to persuade the Court that what might have looked like a claim which was clearly subject to a statute bar is not, after all, to be viewed in that way, because of a fairly arguable claim for extension or postponement. If the plaintiff demonstrates that to be so, the Court cannot say that the plaintiff’s claim is frivolous, vexatious or an abuse of process. The plaintiff must, however, produce something by way of pleadings, particulars and, if so advised, evidence, in order to give an air of reality to the contention that the plaintiff is entitled to an extension or postponement which will bring the claim back within time. A plaintiff  cannot,  as  in  this  case,  simply  make  an  unsupported assertion  in  submissions  that  s  28  applies. A pleading  of  fraud should, of course, be made only if it is responsible to do so.

[74]     The  issue  was  subject  of  further  comment  by  the  Court  of  Appeal  in

Wrightson Ltd v Blackmount Forests Ltd where the court said:24

[18]     The ultimate burden, therefore, remains on the defendant: it is the defendant who must satisfy the Court that the plaintiff’s cause of action is so clearly statute-barred that the plaintiff’s claim can properly be regarded as frivolous, vexatious or an abuse of process. But there is a shifting evidential burden. Once a defendant has demonstrated that the plaintiff’s proceeding was commenced after the  period  allowed  for  the  particular  cause  of  action  by  the Limitation Act, the persuasive burden shifts to the plaintiff to show that he or she has an arguable case for an extension or postponement which would bring the claim back within time.

[75]     I am not satisfied for the purposes of a strike-out application that the defects are  more  than  further  particulars  and  that  their  inclusion  in  the  11th   amended statement of claim changes the legal basis of the claim against the defendants. That however does not rule out that the defendants may successfully rely on the limitation defence, but that is a question that requires a detailed analysis of facts based on all

available evidence, and for that reason is best determined at trial.

24     Wrightson Ltd v Blackmount Forests Ltd [2010] NZCA 631 at [18] – [19].

Application for particulars for a more explicit pleading

[76]     The  defendants  made  this  application  following  non-compliance  by  the plaintiffs with a notice served on them dated 2 February 2015 in which a series of issues are raised concerning 17 defects which the plaintiffs plead are attributable to breaches of professional duty by the defendants either in relation to structural engineering design, or breaches which ought to have been observed when the defendants undertook inspections for the purposes of construction review.

[77]     The application was made pursuant to r 5.21 which provides:

5.21     Notice requiring further particulars or more explicit pleading

(1)      A party may, by notice, require any other party—

(b)      to give any further particulars that may be necessary to give fair notice of—

(i)       the cause of action or ground of defence; or

(ii)      the particulars required by these rules; or

(b)      to file and serve a more explicit statement of claim or of defence or counterclaim.

(2)       A notice must indicate as clearly as possible the points on which the pleading is considered defective.

(3)       If the party on whom a notice is served neglects or refuses to comply with the notice within 5 working days after its service, the court may, if it considers that the pleading objected to is defective or does not give particulars properly required by the notice, order a more explicit pleading to be filed and served.

(4)       Even if no notice has been given under this rule, the court may on its own initiative order a more explicit pleading to be filed and served.

[78]     The application seeks orders in respect of paragraphs 25, 26, 27, 28, 29, 30,

33, 40, 42, 47, 48, 49, 50 and 51 of the 11th  amended statement of claim. The defendants say that the plaintiffs’ claim is confusing or lacks sufficient pleading, and is prejudicial to the defendants. Particularly, they contend that the claim does not identify the breaches of duty in relation to each defect and how each breach and each defect affect any loss suffered. They say the claim needs to specify why each of the

17 identified defects is a defect and what relevance each defect has on the building’s

ability  to  meet  the  minimum  requirements  of  the  Building  Code.  Further,  the

defendants say the plaintiffs have not identified a causal link between each defect and the necessary remedial work and how such work may require residents to vacate the units. Additionally, they say some of the identified defects relate to weather tightness issues rather than seismic issues, and therefore should not be held against the defendants. The defendants also seek an adjustment of the losses claimed to account for the settlements made with other defendants.

[79]     Mr Kohler submits that the notice given in this case did not indicate the points in which the pleading was considered defective.  He says all the notice did was make demand for further particulars. In response the plaintiffs contend that the adequacy of the structural design, for the purposes of both liability and remedial purposes, requires an overall assessment in toto.

[80]     To the extent that some clarification is required, Mr Kohler, in his written submissions at paragraph 11.13 (which are attached to this judgment as a schedule marked “A”), responds specifically to the matters raised in most of the paragraphs under review.

[81]     Paragraph 29 was not addressed in Mr Kohler’s submissions. As I read the statement of claim, the reference to defects in paragraph 29 can only be a reference to the defects which are specifically pleaded in paragraph 27.  For that reason, I see no need to order any clarification of that pleading.

[82]     Paragraph  40  does  require clarification.    In  the  schedule  attached  to  the defendants’ submissions, four specific questions are posed, which I consider are appropriate, namely:

(a)      A more  explicit  pleading  is  required  specifying  which  losses  the plaintiffs have and will suffer in relation to the weather tightness defects in the building for which they claim the primary settlement agreement and the construction contract do not fully compensate them for and for which SML is alleged to be liable;

(b)A more  explicit  pleading  is  required  specifying  which  losses  the plaintiffs alleged they have suffered and will suffer as a consequence of the “structural, seismic and other defects in the building” for which they say the primary settlement agreement and the construction contract do not compensate them for and for which they allege SML is liable;

(c)      A  more  explicit  pleading  is  required  specifying  whether  “the structural, seismic and other defects in the building” referred to in paragraph 40(b) is confined to those defects numbered defects 1-17 in paragraph 27;

(d)If “the structural, seismic and other defects in the building” referred to in paragraph 40(b) are not confined to the defects numbered 1-17 in  paragraph  27,  full  particulars  are  required  of each  such  defect referred to.

[83]     I consider the requests in respect of paragraphs 50 and 51, which also were

not clarified in Mr Kohler’s submissions.

[84]     In respect of paragraph 50, I agree with the defendants that more explicit pleasing is required that should specify:

(a)      The factual or legal basis on which the plaintiffs’ allege the Council will require the plaintiffs to include as part of their remedial works the work necessary to address all the defects set out in paragraph 27;

(b)       The precise remedial works the Council will so require;

(c)      For  each  of the  remedial  works  that  the  Council will  so  require, precisely which defects they will be addressing.

[85]     In respect of paragraph 51, the defendants ask for a more explicit pleading that clarifies whether the plaintiffs allege the Council will require remediation work to the 67% NBS standard. In the event that the plaintiffs do make such an allegation,

the defendants seek a specification of the basis upon which the plaintiffs allege the

Council is able to require this.

[86]     I agree with the defendants that more explicit pleadings are needed in respect of paragraphs 50 and 51 of the 11th amended statement of claim. I order accordingly.

The application that the plaintiffs answer interrogatories

[87]     The defendants served on the plaintiffs on 5 January 2015 a notice to answer interrogatories.    It  required  the  first  the  plaintiff  to  respond  to  approximately

12 matters on weather-tightness issues, 11 matters on alleged non-seismic structural defects, 12 matters on alleged structural seismic defects, and approximately 120 matters in other areas.

[88]     The notice required the second plaintiffs to answer the same questions on weather-tightness  issues,  the  same  questions  on  alleged  non-seismic  structural defects issues, and approximately another 140 matters.

[89]     Mr O’Callahan for the defendants helpfully summarised the groups which the

interrogatories fall into as follows:

(a)       Those   for   the   first   plaintiff,   the   Body   Corporate,   to   answer concerning:

(ii)Any  remedial  work  to  be  undertaken  for  weathertightness defects that is outside the Aitken Scope;

(iii)Any  remedial  work  to  remedy  the  non-seismic  structural defects that is outside the Aitken Scope;

(iv)The remedial work that is required because the building is earthquake-prone;

(v)Which of various alleged losses relate to which of the three remedial scenarios pleaded;

(vi)Which of various alleged losses relate to the pleading that the building  is  earthquake-prone  and  to  which  categories  of defects;

(b)Those directed to individual second plaintiffs which are sought if, and only if, they propose remedial work to their unit that is outside the scope of the remedial work being undertaken by the Body Corporate (categories i, ii, iii above);

(c)      Those directed at individual second plaintiffs who have sold their units; and

(d)Those directed at all second plaintiffs concerning the stress they have alleged they suffered.

[90]     The plaintiffs oppose this application and say:

(a)       It is not necessary that an order be made at this time; and

(b)That  there  are  a  number  of  problems  with  the  interrogatories themselves in that they:

(i)        Go beyond questions of fact; (ii)          Are ambiguous;

(iii)Are founded on propositions that are either irrelevant or not accepted;

(iv)     Mix the issues of fact, law and opinion;

(v)      Are based on disputed assumptions of fact and law; (vi)         Are oppressive;

(vii)     That answering them would be unjustly burdensome.

[91]     In reply Mr O’Callahan submitted that the interrogatory questions do not mix fact and law, or go beyond the questions of fact because all questions posed are closed answer, qualifying questions. He says the questions are not founded on irrelevant propositions or disputed assumptions, evident by the plaintiffs’ failure to identify any ambiguities or precise disputed assumptions in the questions. In reply to the allegation that the interrogatories are oppressive, Mr O’Callahan says the allegation is general as the plaintiffs have not identified any particular interrogatories that are oppressive or explained the ways in which they are oppressive.

[92]     Interrogatories are dealt with in part 8, subpart 2 of the High Court Rules.  Of importance to this application is r 8.38, which provides:

8.38     Order to answer

(1)       A Judge may, at any stage of any proceeding, order any party to file and serve on any other party (whether the interrogating party or not) a statement prepared in accordance with rule 8.39 in answer to interrogatories specified or referred to in the order.

(2)       The  interrogatories  must  relate  to  matters  in  question  in  the proceeding.

(3)      The order may require the statement to be verified by affidavit.

(4)       The  Judge  must  not  make  an  order  under  subclause  (1)  unless satisfied that the order is necessary at the time when it is made.

[93]     In  Todd  Pohokura  Ltd  v  Shell  Exploration  NZ  Ltd  the  Court  of Appeal provided the following summary of the nature, purpose and permissible scope of interrogatories:25

[14]      … An interrogatory is a question asked before trial for the purpose of eliciting an answer on oath or affirmation which is admissible in evidence at trial. Like all questions, it must be directed towards advancing one side's case or damaging the other's case. It must accordingly be relevant to an issue raised on the pleadings or a fact in dispute for determination.

[15]     An interrogatory must also, like a question in cross-examination, be precise and unequivocal, and amenable to a direct and meaningful answer from information within  the  knowledge  of  or  reasonably

25     Todd Pohokura Ltd v Shell Exploration NZ Ltd [2009] NZCA 561 at [14]–[16].

available to the person required to answer. It must not place unnecessary or burdensome obligations on the interrogated party, or be prolix. And its purpose must not be to search or probe on the speculative basis that an answer may prove relevant (colloquially known as fishing). A question which offends these elements will fall within the general category of oppressiveness.

[16]     An interrogatory is an exception to the settled manner of adducing evidence and in particular to a defendant's right not to call evidence at trial. Accordingly the Court must be satisfied that the interrogatory is necessary where an application to issue interrogatories is opposed: r 8.5 High Court Rules. A material consideration is whether briefs of evidence will be given by the party to be interrogated. Moreover, an interrogatory is not to be confused with a request for further particulars.

[94]     At the hearing no attempt was made to advise whether the matters raised were covered by the briefs of evidence. This is largely due to the fact that the briefs of evidence were exchanged one day before the hearing – a result of the history of progression of this case, as described above.

[95]     At this stage I am not satisfied that the order is necessary. The answers sought by the interrogatories may well have already been answered in the plaintiffs’ briefs of evidence, and the defendants have not established anything to the contrary.

[96]     I reserve leave for the defendants to demand answers to the interrogatories after they have fully reviewed the plaintiffs’ briefs of evidence and have narrowed down the scope of inquiry, eliminating any matters that have been answered in the plaintiffs’ briefs.

Result

[97]     I make the following orders:

(a)      The  application  to  determine  questions  before  trial  or  in  the alternative, to strike out specific parts of the 11th  amended statement of claim is dismissed;

(b)The application to strike out parts of the 11th  amended statement of claim that are new causes of action is dismissed;

(c)      In respect of the application to provide more explicit pleadings, orders are made in terms of [82], [84], [85] and [86] of the judgment and paragraphs 40, 50 and 51 of the 11th amended statement of claim. The plaintiffs are to provide such particulars by 28 April 2015;

(d)In  respect  of  the  application  to  answer  interrogatories,  orders  are made as set out in [96] of the judgment.

Costs

[98]     Costs  are  reserved.    If  counsel  cannot  agree  as  to  costs,  memoranda  in support, opposition and reply are to be served at seven-day intervals.

JA Faire J

“A”