Body Corporate 33856 v Endean
[2013] NZHC 629
•27 March 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV2010-404-001415 [2013] NZHC 629
BETWEEN BODY CORPORATE 338356
First Plaintiff
ANDDANIEL JAMES HALASKA & ORS Second Plaintiffs
ANDWILLIAM ARTHUR ENDEAN, JOHN EDWARD ENDEAN AND CHRISTINE HEATHER ENDEAN
First Defendants
ANDCLARK BROWN ARCHITECTS LIMITED
Second Defendant
Hearing: 25 March 2013
Appearances: M L Thornton for first defendant
S R Judd for fifth defendant/second third party
Judgment: 27 March 2013
JUDGMENT OF ASSOCIATE JUDGE ABBOTT
This judgment was delivered by me on 27 March 2013 at 5pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors:
J Rushton/P Biddle, Price Baker Berridge, P O Box 21463, Henderson, Waitakere
M Thornton, PO Box 91441, Victoria Street West, AucklandD Spencer, PO Box 8080, Symonds Street, Auckland
D Barr/S Hann, Auckland Council, Private Bag 92300, Auckland
J Appelby, Ladbrook Law Limited, PO Box 37633, Parnell, AucklandJ A McKay/K Kemp, Chapman Tripp Sheffield Young, PO Box 2206, Auckland
C Walker/B Prewett, Gilbert Walker, PO Box 1595, Shortland Street, Auckland
Counsel:
B Hollyman, Barrister, P O Box 4338, Shortland Street, Auckland
S Judd, Barrister, P O Box 3320, Shortland Street, Auckland
BODY CORPORATE 338356 V WILLIAM ARTHUR ENDEAN, JOHN EDWARD ENDEAN AND CHRISTINE HEATHER ENDEAN HC AK CIV 2010-404-001415 [27 March 2013]
ANDAUCKLAND CITY COUNCIL Third Defendant
ANDJAMES HARDIE NEW ZEALAND LIMITED
Fourth Defendant/First Third Party
ANDRUDNEV DOOR SYSTEMS NORTH ISLAND LIMITED
Fifth Defendant/Second Third Party
ANDGRAHAM HENRY WILLIAM WHITE Sixth Defendant
ANDBOSTICK (AUSTRALIA) PTY LIMITED Third Third Party
ANDBONDOR NEW ZEALAND LIMITED Fourth Third Party
[1] This proceeding concerns a leaky building dispute. It arises out of the construction of a unit-title property development in St Paul Street, Auckland, known as St Paul Apartments. The plaintiffs are the Body Corporate for the development, together with present or past unit owners. They say that the property has been constructed with defects that have allowed ingress of moisture and have caused damage to the building. They sue several parties for the cost of remedial work which they say is required.
[2] The defendants include the former owners and developers of the land (the trustees of family trusts that carried out the development in a partnership, to whom I will refer as the Endeans), James Hardie New Zealand Ltd (a manufacturer of building products, including panelling used to clad the building), and Rudnev Door Systems North Island Ltd (the assembler of the cladding panels used on the building).
[3] As well as being sued by the plaintiffs, Rudnev has been joined as a third party by the Endeans, who are seeking contribution (as a concurrent tortfeasor) towards any sum for which the Endeans may be liable, and damages for breach of a duty of care said to be owed to them both as owners of units in the development and as developers. In addition James Hardie has made a cross claim against Rudnev also seeking contribution as a concurrent tortfeasor.
[4] The plaintiffs and the Endeans say that Rudnev is liable to them because it installed the cladding panels (negligently). James Hardie merely refers to the allegations made in the plaintiffs’ claim and says that if those allegations are established it is entitled to contribution from Rudnev.
[5] Rudnev says that it did no more than supply labour under a contract with James Hardie to construct the cladding panels at James Hardie’s factory, and did not carry out any installation or other work on the building. It has applied for summary judgment against the plaintiffs, the Endeans and James Hardie on the basis that there is no arguable claim against it.
[6] The plaintiffs and James Hardie have not opposed Rudnev’s application, and
did not participate in the hearing.
[7] The Endeans have opposed Rudnev’s application. They say that there is a factual dispute as to whether Rudnev played a part in the negligent installation of the cladding on the building and that the dispute cannot be resolved summarily. They also apply to amend their claim against Rudnev to add a pleading that Rudnev was also negligent in the manufacture of the panels.
[8] It is common ground that the questions that the Court must determine on Rudnev’s application are whether there is an arguable dispute that Rudnev installed the panels and, secondly, whether the Endeans can file an amended statement of claim containing an allegation that Rudnev was negligent in the manufacture of the cladding panels (the Endeans accept that if this is a new allegation rather than an expansion of their existing pleading it cannot be added as it is time-barred by s 393 of the Building Act 2004).
[9] There is also a sub-issue (to the issue over Rudnev’s part in the installation of the panels) as to whether the Endeans can rely on material in a letter sent to their solicitor by Rudnev’s solicitor on a without prejudice basis. I do not need to determine that issue in light of a resolution reached in the hearing, but will record the outcome.
[10] For the reasons I will set out in this judgment, I have come to the view that there is no arguable dispute of material facts over Rudnev’s part in the installation of the panels, and that the proposed amendment of the statement of claim should be declined as it adds a new cause of action rather than simply expanding upon an existing one.
Background
[11] In 2001, the Endeans were the owners of land at 4 St Paul Street, Auckland. They decided to develop the land by construction of a multi-storey building comprising commercial and residential units (but primarily residential) created under
the Unit Titles Act 1972. Development was undertaken in three stages. Building consents for the three stages were granted between February 2002 and April 2002, and construction was completed in 2004 (code compliance certificates were issued for all three stages in April 2004).
[12] The Endeans engaged Lockheed Ltd to undertake the construction work. Lockheed is not a party to the claim, as it has been struck off the Companies Register. The plaintiffs allege that Lockheed engaged James Hardie to provide services and product for the cladding of the building, comprising large building panels that were manufactured offsite.
[13] James Hardie engaged Rudnev to assemble the panels. Rudnev did its last work under that contract in November 2002.
[14] Units in the development were sold from 2004 onwards. In 2006 the first plaintiff (the Body Corporate for the development, established under the Unit Titles Act 1972) commissioned an investigation into perceived problems with the development. The plaintiffs say that this investigation identified defects in the design or construction of the building, including water entry through the cladding. The plaintiffs issued this proceeding in March 2010 against the Endeans, the architects who designed the building, and Auckland City Council, the territorial authority that issued the building consents and code compliance certificate.
[15] On 2 December 2011, the Endeans joined James Hardie and Rudnev as first and second third parties respectively. Shortly afterwards, on 21 December 2011, the plaintiffs filed a second amended statement of claim joining three further defendants, including James Hardie as fourth defendant and Rudnev as fifth defendant. Although the plaintiffs have further amended their statement of claim since December 2011, the allegations of negligence in respect of the cladding have not changed (in any material respect).
[16] On 31 October 2012, James Hardie issued a cross-claim against all other defendants except Auckland City Council. On 6 December 2012, Rudnev brought its present application, seeking leave to apply for summary judgment, and seeking summary judgment dismissing the claims against it by the plaintiffs, the Endeans,
and James Hardie. Rudnev was granted leave to bring the application on 11
December 2012. The Endeans filed notice of opposition on 15 February 2013. The plaintiffs and James Hardie have not opposed the application.
Legal principles for summary judgment
[17] There is no issue between the parties as to the principles that the Court applies when determining an application for summary judgment. In the case of an application by a defendant (or a third party)1 the principles were set out by the Court
of Appeal in Westpac Banking Corp v M M Kembla New Zealand Ltd.2 The general
principles have also been stated succinctly by the Court of Appeal in Krukziener v
Hanover Finance Ltd.3
[18] The following principles have a particular relevance for the present application:
(a) A defendant seeking summary judgment must satisfy the Court that the plaintiff cannot succeed on any of its causes of action.
(b)Summary judgment will be inappropriate where there are disputed issues of material fact, or where material facts need to be ascertained by the Court and cannot confidently be concluded from affidavits.
(c) Although a plaintiff defending an application does not need to put up any evidence, if the defendant has provided evidence that would satisfy the Court that the claim cannot succeed, a plaintiff will usually have to respond with credible evidence of its own.
(d) The defendant applying for summary judgment must have a clear and
complete answer to the plaintiff’s claim: summary judgment should
1 A third party has the same right as a defendant to bring an application for summary judgment: High
Court Rules, r 4.7(2); Tourism Holdings Ltd v Thorburn Consultants (NZ) Ltd HC Auckland CIV-
2009-404-8051, 3 December 2010 at [21].
2 Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [58]–[64].
3 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].
not be granted where there is a dispute of material fact that cannot be resolved properly without a trial.4
Production of without prejudice correspondence
[19] Counsel for the Endeans applied in the hearing for the Court to examine material in the form of a draft affidavit sent by Rudnev’s solicitor to the Endeans’ solicitor in without prejudice correspondence. This application was foreshadowed in a telephone call between counsel late in the day on 18 March 2013, and in the Endeans’ written submissions served on Rudnev on 19 March 2013. Counsel argued that the material should be admitted as without it the Court could be misled or deceived in deciding whether there was a dispute of material fact as to whether
Rudnev had a role in installation of the cladding.5
[20] Counsel for Rudnev took strong exception to the application being made in this way (orally at the hearing). He accepted that the Court could admit such material where there was a possibility that otherwise it could be misled or deceived on an issue, but said that this was a serious matter and a party otherwise entitled to the privilege was entitled to have the matter raised and dealt with formally. He submitted that there are good reasons for the privilege attaching to without prejudice communications, and any departure from that privilege should be countenanced only if was raised fairly, with proper notice. Having said that, he said that Rudnev did not wish to delay matters while a formal application was brought, and although it did not consent, it did not oppose the Court viewing the passages in the draft affidavit (which formed part of the without prejudice communication). Although Rudnev did not oppose the application, counsel maintained its position that there was nothing in the passages to support a finding that the Court would be misled or deceived if the material was not before it. Indeed, he submitted that the material supported Rudnev’s position that it had had no part in the installation of the panelling.
[21] It is a serious matter to say that material has been put before the Court in a
misleading way (whether deliberately or not). The Endeans have had Rudnev’s
4 See Westpac Banking Corp v M M Kembla NZ Ltd, above n 2; Attorney-General v Jones [2003] UKPC 48, (2003) 16 PRNZ 715 at [5].
5 Relying on Cedenco Foods Ltd v State Insurance Ltd (1996) 10 PRNZ 142 (CA) at 143.
affidavits in support of its application since early December 2012, and had ample time to raise the issue in a formal application. Although a trial Judge will always have a discretion to accept an oral application in the course of trial, the ability of the party making that application to have raised it earlier will be taken into consideration, as will prejudice to the other party. I accept in the present case that this issue could have been raised earlier, and formally. At the same time, I accept that there is no particular prejudice to Rudnev in this case – counsel has been able to take instructions on the request, and those instructions are not to oppose it.
[22] After hearing from both counsel, and having been informed as to the content of the two paragraphs in the draft affidavit that were said to bear on the evidence otherwise before the Court as to Rudnev’s role, I ruled in the absence of substantive opposition that I would receive and take into account the two paragraphs that had been identified, but not the rest of the without prejudice communication (counsel for the Endeans having confirmed that those two paragraphs contained the material that he wished to put before the Court). A copy of those two paragraphs was handed to the Court following the morning adjournment.
Is there a dispute of material facts?
[23] The existing claims against Rudnev6 are that Rudnev installed the cladding panels on the building.
[24] Rudnev’s response to this allegation, and the factual basis for its applications for summary judgment, is that it did not install the panels. Instead it says (both in its pleading7 and in the affidavits filed in support of the application),8 that it assembled the panels in James Hardie’s factory and in accordance with James Hardie’s instructions. It also says in evidence that installation was undertaken by another sub-
contractor to James Hardie, Peter Roberts.
6 Paragraph 52 of the plaintiffs’ second amended statement of claim dated 20 December 2011 and paragraphs 27, 31 and 36 of the Endeans’ statement of claim dated 1 December 2011.
7 Paragraph 8 of its defence to the plaintiffs’ claim, paragraph 9 of its defence to the Endeans’ claim, and paragraph 1 of its defence to James Hardie’s claim.
8 This evidence is given by Rudnev’s director, Jamie Adamson and by James Hardie’s contract supervisor at that time, Cyril Moreby, and later in an affidavit in reply by James Hardie’s contract
manager at the time, Tony Smith.
[25] In their notice of opposition, the Endeans contend that further investigation is needed to establish whether Rudnev’s role was as limited as this. One of the trustees, William Endean, has given an affidavit in support of their opposition. He does not claim to have any direct knowledge of Rudnev’s role, but produces two documents obtained in discovery and says that they raise questions about Rudnev’s role that need to be put to witnesses, and that can only be determined properly at trial:
(a) A hand-written work programme discovered by Rudnev that gives an installation programme by reference to the various levels of the building; and
(b) Plans for the installation of the panels (on top of block work) that are
endorsed with the printed words “To be built on site”.
[26] In addition, counsel for the Endeans relied upon the two paragraphs in the draft affidavit of Mr Adamson in which Mr Anderson refers to a visit to the St Paul’s site at James Hardie’s invitation “to see how the panels were being installed” (but adds that they found that no panel installation was taking place that day). Counsel argued that there was no obvious reason for a visit to the site if Rudnev’s sole involvement was to assemble the panels under James Hardie’s direction, and this was a matter that the Endeans ought to be able to explore with witnesses at trial.
[27] I am not persuaded that there is a dispute over material facts. Rudnev’s director, Mr Adamson, has stated unequivocally that Rudnev was engaged, under an oral contract, only to assemble the panels for the building. He says that this was done at James Hardie’s factory premises in Penrose (under an arrangement which had been operating since 1998). He also says that the panels were assembled as instructed by James Hardie, on the basis of plans that it provided, and all that Rudnev did was provide the labour to put the panels together. When they were finished either James Hardie or another contractor would take them away. He states
explicitly:9
We did not install the panels on the St Paul’s building. Rudnev did not do any work at all on the building. Our only involvement with the St Paul’s project was the work we did inside the factory assembling the panels as directed by James Hardie.
[28] Mr Adamson says that Rudnev’s contacts at James Hardie at that time were Tony Smith, the contracts manager, and Cyril Moreby, a contract supervisor. Mr Moreby provided an affidavit in support of Rudnev’s application. He confirmed that James Hardie had the contract to provide panels for the St Paul’s apartment building and said that he was aware that Rudnev was engaged to supply those panels. Although he was not directly involved in the St Paul’s project, he confirmed that to the best of his knowledge Rudnev was not contracted to install the panels at St Paul’s, and did not carry out any work at the site. When this primary evidence was challenged by Mr Endean (by production of the two documents to which I have referred) Rudnev filed an affidavit by Tony Smith, who had a direct involvement in the St Paul’s project. Mr Smith says that his role was to organise and coordinate various sub-contractors, and that he was responsible for managing the contract with
Rudnev and worked closely with Mr Adamson. He states:10
3. Rudnev was contracted to perform the labour involved in constructing the wall panels in the factory in accordance with the plans and specifications provided by James Hardie. Rudnev had no involvement in the design of the panels. An engineer designed the panel system and James Hardie prepared drawings based on this design. These drawings were then provided to Jamie Adamson and Rudnev’s job was to follow the drawings. It was not part of Rudnev's contract to advise or comment on the design of the panel system or the drawings. Rudnev’s only role was to construct the panels in accordance with the drawings, which they did.
4. When sections of panels had been constructed, James Hardie delivered them to the St Pauls building site. The panels were then installed on the building by another contractor, Peter Roberts. Rudnev had no involvement in installing the panels on the building. The installation job was contracted to Peter Roberts.
[29] Mr Smith then comments on the two documents that Mr Endean had produced:
(a) He says that he wrote the handwritten work programme and gave it to
Mr Adamson, as Mr Adamson needed to know James Hardie’s
installation programme in order to plan its work. He confirmed that
Rudnev had no involvement in installing the panels on the building.
(b)He said that the drawings were prepared by James Hardie, and to the extent that they related to work that had to be carried out onsite, that work was not performed by Rudnev (he says that it was performed by another sub-contractor, Peter Roberts).
[30] Counsel for the Endeans argued that it was plain from the drawings that the panels had to be installed on top of a concrete block, and one of the allegations in the plaintiffs’ claim is that water was penetrating the cladding at various junctions. He argued that the Endeans were entitled to test this affidavit evidence (and particularly the explanation for the documents) in light of the pleading of defects in relation to cladding. He said that the Endeans were also entitled to cross-examine Mr Adamson on the reason for visiting the site, arguing that there was no need for a visit if Rudnev was merely assembling the panels in James Hardie’s factory.
[31] I am not persuaded that these matters require further investigation at trial. The documents on which the Endeans rely are not inconsistent with Rudnev’s evidence that they did not install the panels or do any work onsite. To the extent that they might be capable of some other interpretation, they have been explained by Mr Smith. Counsel for the Endeans referred to Mr Endean’s evidence as to the conclusions to be drawn from the statement on the plans “To be built on site”. However, that notation is not inconsistent with installation being undertaken by Mr Roberts, and there is no evidence from anyone (including the Endeans’ experts) to suggest that there is some component of the assembly process that can only be undertaken on site, or indeed was completed on site.
[32] It is telling that James Hardie has not opposed Rudnev’s application. Although neither Mr Moreby nor Mr Smith are still employed by James Hardie (and so do not necessarily represent James Hardie’s view of the facts), it is highly unlikely that James Hardie now would not know if Rudnev had had a part in the installation of the panels, and would not have opposed this application if Rudnev had played some part in that process.
[33] I also regard the trip to site by Mr Adamson and his two employees as lacking in any material significance. There could well have been some reason for James Hardie’s invitation to visit the site (perhaps to demonstrate some matter relevant to the assembly), but the visit to site is not inconsistent with Rudnev’s unequivocal denial of any role in installation. At most it might have had some bearing on James Hardie’s instructions regarding assembly; and the proposed allegation of faulty manufacture, but that is not the current pleading. I do not need to determine the reason for the visit.
[34] This is not a case of needing to make robust findings to decide a dispute over material facts. There is no evidence that challenges Rudnev’s affidavit evidence. The documents on which the Endeans rely as raising a dispute over facts in relation to Rudnev’s role do not link Rudnev to the installation (they are neutral), and any possible speculation about them has been answered by the evidence of an independent witness, Mr Smith.
[35] I find that there is no basis for an arguable dispute on the issue of whether Rudnev installed the panels, which is the first issue before the Court on the present application.
The proposed amendment
[36] As already mentioned, the current pleading against Rudnev (whether by the plaintiffs or by the Endeans) is based on an allegation that Rudnev installed the cladding panels during the construction of the building.11 The plaintiffs then plead that Rudnev owed them a duty of care in installing the cladding and that the building has defects as a result of a breach of duty (although they do not expressly plead the alleged breach).12 The Endeans also plead that Rudnev owed the plaintiff (and themselves as owners) a duty of care in installing the cladding,13 and that it owed
them a duty of care as developers in providing “the cladding services” for the
11 See above n 2.
12 Paragraph 53 of the plaintiffs’ second amended statement of claim.
13 Paragraphs 28 and 32 of the Endeans’ statement of claim.
construction of the building.14 They then plead (in respect of all three causes of action against Rudnev)15 that its:
... installation of the cladding was defective and in breach of its duty of care to the plaintiffs.
[37] After Rudnev filed its application for summary judgment, the Endeans indicated that they would amend their claim to include an allegation of negligent assembly of the panels. They were directed to file any proposed amended pleading, with their notice of opposition and affidavits in opposition (the time for doing so was subsequently extended to 15 February 2013). The Endeans filed their notice of opposition and supporting affidavit on time, but did not include a draft statement of claim. That has been produced with counsel’s submissions for this hearing. For that reason counsel for Rudnev could only address this issue in a general way in his written submission (which had been filed by the time of the amended pleading).
[38] The Endeans propose to amend their statement of claim dated 1 December
2011 by pleading that (the emphasis is mine):
(a) Rudnev manufactured and installed the cladding.16
(b)Rudnev owed the plaintiffs and the Endeans (as owners) a duty of care in manufacturing and installing the cladding.17
(c) Rudnev’s manufacture and installation of the cladding was defective and in breach of its duty of care.18
[39] The proposed amended statement of claim also includes a paragraph of particulars of the proposed allegation of negligent manufacture:19
Particulars of the Negligent Manufacture
14 Paragraph 37 of the Endeans’ statement of claim: “the cladding services” having been defined in
paragraphs 11 of the claim to include design, manufacture, installation and supervision of installation.
15 Paragraphs 29, 33 and 38 of their statement of claim.
16 Amending paragraph 27 (and consequentially paragraphs 31 and 36 of their statement of claim).17 Amending paragraphs 28 and 32 of their statement of claim.
18 Amending paragraphs 29, 33 and 38 of their statement of claim.19 Given as particulars to paragraphs 29, 33 and 38 of the claim.
29.1 Rudnev failed to install sealant correctly in the joint between the wall panels to ensure the joint was weathertight. The sealant in the join should have been installed up under the perimeter channels that Rudnev riveted to the panels.
[40] Counsel for the Endeans accepted at the commencement of the hearing that if these amendments were to be construed as the addition of a new cause of action, the amendment would be precluded because it was pleaded outside the 10-year limitation period under s 393 of the Building Act 2004.20
[41] Counsel were agreed that the issue for the Court to determine was whether the proposed amendments (and specifically those relating to alleged failure to insert sealant “up under the perimeter channels that Rudnev riveted to the panels”) introduces a new cause of action, or is an acceptable expansion of the existing pleading.
[42] Counsel for the Endeans accepted that there was a distinction to be made between manufacture and installation, but submitted that the allegation in relation to manufacture was already before the Court in the pleading in paragraph 37 of the Endeans’ statement of claim that, Rudnev owed them (as developers) a duty of care in providing the cladding services.21 He argued that as Rudnev had already responded to that pleading (by its pleaded explanation that it was only an assembler of the panels), the real contest was before the Court, and the proposed amendments were not substantially different.22
[43] The test for whether an amendment to pleadings raises a new cause of action (for the purposes of the High Court Rules relating to amendment) was recently confirmed by the Court of Appeal in The Ophthalmological Society of New Zealand Inc v The Commerce Commission23 by reference to the decision of this Court in Smith v Wilkins & Davies Construction Ltd:24 it requires “something essentially
different from that which was pleaded earlier”, and is a question to be decided on the
20 High Court Rules, r 7.77(2)(a), requires that a fresh cause of action must not be statute barred.
21 That phrase having been defined earlier in the statement of claim to include manufacture – see above n 14.
22 Relying on Smith v Wilkins & Davies Construction Ltd [1958] NZLR 958 (SC) at 961 and Steens
Bros Ltd v Youth Hostels Association of New Zealand Inc CA3/86 and 40/86, 17 April 1986 at 4–5.
23 The Ophthalmological Society of New Zealand Inc v The Commerce Commission CA168/01, 26
September 2001.
24 Above n 22.
facts of each case.25 The Court of Appeal also cited Australian authority26 to the effect that the amendment would be treated as a new cause of action where the new pleading varied so substantially from what had previously been pleaded that it would involve investigation of matters of fact or questions of law that were different from what had already been raised and for which fair warning had not been given so that it was unfair to the defendant to put him in peril of a judgment founded on the new matter.
[44] Counsel for the Endeans argued that the amendments in this case were not essentially different: they arose out of the same subject matter as the original pleading – responsibility for the cladding panels for the building; an allegation of manufacture had been raised (in paragraph 37); Rudnev had responded to that allegation in its pleading; and it could not be said that it was unfair on Rudnev to introduce it at this stage as it had been able to locate and brief witnesses who had addressed the allegations.
[45] I do not accept that this is a reframing or merely an extension of the Endeans’ existing pleading. There is no allegation of negligent manufacture against Rudnev in the present statement of claim. The critical pleading is the alleged breach of duty pleaded in paragraphs 29, 33 and 38, which is installation of the cladding. A pleading of negligent manufacture (by omission of sealant under the perimeter channels that Rudnev riveted to the panels) adds new and quite distinct matters of fact. It requires consideration of a different contract (the oral contract between James Hardie and Rudnev) to the contract for installation (which James Hardie’s contract manager at the time confirms was with another sub-contractor, Peter Roberts), and involves different issues in relation to sealant (the issue in respect of installation concerns the application of sealant between the pre-fabricated panels or at the interface between the panels and other construction elements, rather than the use of sealant in the assembly of the panels).
[46] I also reject the argument that the allegation of manufacture has already been
put in issue by the reference in paragraph 37 to cladding services and Rudnev’s
response to that allegation. When construed in the context of the pleading of breach
25 At [23].
26 Harris v Raggatt [1965] VR 779 at 785.
of duty (negligent installation) the reference to cladding services in paragraph 37 can only mean, in the case of Rudnev, the installation aspect of those services. Further, Rudnev’s explanation of its role in the assembly of the panels is clearly not a response to manufacture, but simply pointing out the difference between the work that they were undertaking (assembly) and the pleading that they undertook installation.
Overall justice
[47] The Endeans also advance the overall justice of the case as a ground for opposing summary judgment. Counsel did not expand, in submissions, on the matters set out in the Endeans’ notice of opposition, that the amendment would not surprise Rudnev (as it had already been able to plead positively to its assembly role, and had been able to locate and brief relevant witnesses), and there was adequate time to address the new pleading before trial.
[48] I do not see that these matters assist the Endeans, for the reasons I have already given, and in light of my finding that the pleading does raise a new cause of action. However, to the extent that there is some residual discretion to bring to bear, I must weigh the effect on the Endeans of disallowing further amendment against the effect on Rudnev of remaining in this proceeding.
[49] The Endeans have known of Rudnev’s contention that it only assembled these panels since February 2012, and have had ample opportunity to amend their pleading within the limitation period. When faced with Rudnev’s application for summary judgment they have belatedly sought to add the allegation of negligent manufacture (omission of sealant in the manufacturing process). The case for it is vague. There is no attempt to address grounds for imposing liability on Rudnev as distinct from James Hardie, nor is there any pleading or evidence as to the damage that might have resulted from it. As against that the Endeans are asking that Rudnev be required to remain in a very lengthy trial (currently estimated to take three months) and face a claim for approximately $9 million. In my view the overall justice, if it is in fact relevant, favours Rudnev.
Decision
[50] For the reasons I have given I find that none of the plaintiffs, the Endeans or James Hardie, has an arguable claim against Rudnev. Further, I find that the Endeans’ proposed amendment of their statement of claim would introduce a new cause of action, which is outside the limitation period provided by s 393 of the Building Act 2004, and therefore is statute barred.
[51] I enter summary judgment for Rudnev against the plaintiffs, the Endeans and James Hardie, dismissing all claims against it. I dismiss the Endeans’ application for leave to amend their statement of claim.
[52] Counsel for Rudnev has asked for the opportunity to file a memorandum in support of costs. I direct that any memorandum be filed and served within 10 working days, and that the Endeans file any memorandum in response within a further five working days. I do not understand Rudnev to be seeking costs against the plaintiffs or James Hardie (who did not oppose this application). However, if I am wrong in that, the same timetabling is to apply to any claims for costs that
Rudnev may wish to make against those parties.
Associate Judge Abbott
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