Body Corporate 355492 v Queenstown Lakes District Council
[2022] NZHC 658
•1 April 2022
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2015-425-36
[2022] NZHC 658
BETWEEN BODY CORPORATE 355492
First Plaintiff
JOHN ROBERT CHESTNEY & ORS
Second PlaintiffsAND
QUEENSTOWN LAKES DISTRICT COUNCIL
First Defendant
ELLIOTT ARCHITECT LIMITED (IN LIQUIDATION)
Second Defendant
EDWIN GERARD ELLIOTT
Third DefendantHOLMES STRUCTURES LIMITED (IN LIQUIDATION)
Fourth Defendant
continued….2
Hearing: 17 March 2022 Appearances:
D J Powell and G B Lewis for Plaintiffs
C M Meechan QC and M L Rhodes for First Defendant T E Hutchinson for Tenth Third Party (by VMR)
Judgment:
1 April 2022
JUDGMENT OF ASSOCIATE JUDGE LESTER
(Plaintiffs’ Application for Orders for Discovery)
BODY CORPORATE 355492 v QUEENSTOWN LAKES DISTRICT COUNCIL [2022] NZHC 658
[1 April 2022]
AND ARCH UNDERWRITING LIMITED AT LLOYD’S LIMITED
Fifth Defendant/Fifth Third Party
ASTA MANAGING AGENCY LIMITED
Sixth Defendant/Sixth Third PartyHARDY (UNDERWRITING AGENCIES) LIMITED
Seventh Defendant/Seventh Third Party
LIBERTY MANAGING AGENCY LIMITED
Eighth Defendant/Eighth Third Party
STEPHEN BRUCE McLEAN
First Third PartyJULIE RAEWYN WENSLEY JACK
Second Third PartyPETER LAWSON
Third Third Party
DANIEL STEWART
Fourth Third PartyDE GEEST CONSTRUCTION LIMITED
Ninth Third PartyDE GEEST BATHROOMS LIMITED
Tenth Third Party
[1] The plaintiffs seek orders for discovery against the first defendant, Queenstown Lakes District Council (QLDC).
[2] The plaintiffs are the Body Corporate 355492 and the owners of apartments in the Oaks Shores Complex on Frankton Road in Queenstown (Oaks Shores). Oaks Shores comprises 84 principal units.
[3] The plaintiffs allege Oak Shores suffers from significant weathertightness, structural, fire safety and bathroom waterproofing defects. They assert that extensive remedial works are required to address the defects.
[4] QLDC is the local authority responsible for administering building consents in the area in which Oaks Shores is situated.
[5] The plaintiffs claim that QLDC was negligent in its processing of the building consent applications, inspecting the building work and the issuing of code compliance certificates for Oak Shores.
[6] The plaintiffs have commenced remedial work. QLDC granted a building consent for the remedial works to Block 1 of the complex in May 2019 and the consented works were carried out between June 2019 and November 2021. Code compliance issued in respect of the Block 1 remedial works in January 2022.
[7] QLDC granted a building consent for the remedial works for Block 2 in August 2021 and those works commenced on 3 November 2021. The remedial works are estimated to be completed at the end of June 2023.
[8] The plaintiffs complain that QLDC has not provided discovery of its files relating to the remedial works for Blocks 1 and 2.
[9] The plaintiffs seek an ordering requiring QLDC to discover the following documents:
(1)Body Corporate 355492’s applications for building consent submitted to the Queenstown Lakes District Council (“QLDC”) on 3 July 2018 for Block 1 and building consent application dated 24 June 2021 for Block 2 (“Building Consent Applications”), including all accompanying documents.
(2)Memoranda, emails and/or other communications within QLDC in relation to the Building Consent Applications.
(3)Letters, memoranda, emails and/or other communications with persons outside of QLDC in relation to the Building Consent Applications.
(4)Further information provided by the Body Corporate or its representatives in relation to the Building Consent Applications.
(5)Advice sought by QLDC in relation to the Building Consent Applications.
(6)Assessments, reports or reviews, whether produced by QLDC or an outside party, in relation to the Building Consent Applications.
(7)Building Consent BC180915 issued on 31 May 2019 (“Block 1 Remedial Consent”).
(8)Code Compliance Certificate application for BC180915 dated 16 November 2021 (”Block 1 CCC Application”).
(9)Building Consent BC210824 issued on 9 August 2021 (“Block 2 Remedial Consent”).
(10)Any other documents held by QLDC in relation to the Building Consent Applications, the Block 1 Remedial Consent, the Block 1 CCC Application and the Block 2 Remedial Consent.
[10] The plaintiffs say QLDC is obliged to discover the above documents as either they are caught by a tailored discovery order made by the Court in August 2015 or alternatively, caught by QLDC’s continuing obligation to provide discovery under r 8.18 of the High Court Rules 2016 (the Rules).
The tailored discovery order
[11] On 21 August 2015, Mander J ordered tailored discovery in terms of a joint memorandum of the parties.
[12] The plaintiffs, in their written submissions, highlighted the following agreed categories of tailored discovery:
To the extent that documents exist:
…
b)Internal and external documents and correspondence which formed part of any building consent application(s) including the processing of any building consent application(s);
c)Internal and external documents and correspondence relating to the processing and issuing of building consents;
d)Internal and external documents and correspondence relating to the carrying out of inspections at Oaks Shores, including:
i)Documents form the building inspection department including site inspection reports, records of request for inspections and inspection and certification of Oaks Shores; and
ii)Building inspectors timesheets, daily inspection programmes, site inspection records and diary entries (to the extent that they are in existence and/or in the parties’ possession).
e)Internal and external documents and correspondence relating to the processing and issuing of the Code Compliance Certificate up to the issuing of final Code Compliance Certificates;
…
g)All other records, documents and correspondence relating to Oaks Shores generated after the Code Compliance Certificate was issued (excluding clearly irrelevant documents such as noise and animal complaints);
…
j) Any other relevant documents relating to engagement of Queenstown Lakes District Council as certifier of Oaks Shores.
[13] In particular, category (g) above was submitted to be in broad terms with only limited exclusions.
[14] Mr Powell, counsel for the plaintiffs, submitted that category (g) was wide enough to encompass documents relating to the remedial works.
[15]Rule 8.18 of the High Court Rules 2016 provides:
8.18Continuing obligations
(1)Each party against whom a discovery order is made has a continuing obligation to give discovery and offer inspection at all stages of the proceeding, even if that party has filed and served an affidavit of documents that complies with this subpart.
(2)A party must discover a document if, in the course of complying with an order for tailored discovery, that party becomes aware of a document that is not required to be discovered under the order, but that—
(a)adversely affects that party’s own case; or
(b)adversely affects another party’s case; or
(c)supports another party’s case.
[16]Mr Powell in effect ran the two obligations together, submitting:
The plain wording of the discovery order, in conjunction with Rule 8.18(1), clearly captures the remedial documents. In particular, categories (g) and (j) are so broad in scope that no reasonable interpretation could lead to the conclusion they relate only to the original construction of Oak Shores.
(footnotes omitted)
[17] Mr Powell submitted that the scope of repairs and the extent of remedial works was in issue and, with the repairs being underway, there was reason to believe, based on expert affidavit evidence filed by the plaintiffs, there may be commentary by QLDC and/or its consultants as to the purpose and/or adequacy of the proposed remedial works. Mr Powell submitted that QLDC is likely to take a more conservative approach to the adequacy of the repairs than the experts engaged for the purposes of litigation. He submitted QLDC and its staff were more likely to ask whether the proposed remedial works goes far enough and record the basis for any concerns regarding the
adequacy of the work. Mr Powell submitted the evidence filed on behalf of QLDC did not deny that such documents existed.
Are the documents sought within tailored discovery?
[18] Ms Meechan QC, counsel for QLDC, submitted the documents sought in this application are not within the categories of tailored discovery. She notes the categories of tailored discovery were agreed at a time prior to the remedial consents being applied for, processed and granted. She submitted it cannot have been in the contemplation of the parties that documents relating to the remedial consents would form part of the discovery order when they formed no part of the pleaded claim at the time the discovery order was made.
[19] Ms Meechan notes that, while the provision of remedial works documentation by the plaintiffs themselves was anticipated in the discovery order, the provision of documents generated by QLDC in relation to remedial works was not. She submits that, had it been anticipated and agreed that QLDC was to provide its internal documents in relation to remedial works which in 2015 were a prospect but not a reality, the parties would have recorded such as an express obligation. She says it would be “unsatisfactory” to infer an obligation into a tailored discovery order made by consent over six years ago.
[20] The categories of tailored discovery relied on by the plaintiffs are preceded by “to the extent that documents exist”. In relation to the plaintiffs’ obligation to discover remedial works documents, the final category is: “Staged discovery of remedial documents (if remedial works are carried out during the proceeding)”.
[21] Accordingly, the plaintiffs’ obligation in relation to discovery of remedial works documents was expressly recorded to be ongoing. Similarly, under the heading “First plaintiffs’ documents” the last category was: “Any other documents relating to construction of, and any subsequent repairs to, Oaks Shores”. Again, this was a forward looking obligation. The obligations in relation to QLDC are not expressed to be ongoing or forward looking, nor do they expressly include documents relating to repairs compared to the plaintiffs’ obligations.
[22] The parties turned their minds to the plaintiffs’ discovery obligations in relation to remedial works. There are five headings of tailored discovery for the plaintiffs with four having at least eight sub-categories. QLDC has two categories of discovery; the first with 10 sub-categories, the second with three sub-categories. Throughout, the parties have been represented by leading litigation firms and experienced counsel. It is fair to assume the categories of agreed discovery were subject to negotiation. The absence of an express obligation on QLDC to discover remedial documents when there is an express obligation on the plaintiffs to provide on-going discovery of that type is telling. I conclude the documents now sought by the plaintiffs are not caught by the existing tailored discovery order.
[23]The question remains whether the documents sought are relevant.
[24] As noted, the plaintiffs advanced this application on the basis that the way QLDC assessed the building consent applications for the remedial works and the remedial works themselves were likely to be relevant to the issue of whether the plaintiffs’ proposed scope of works is excessive. As noted at para [17] above, Mr Powell submitted that there may be notes, memorandum, reports et cetera either made by inhouse counsel, staff or consultants, which disclose QLDC’s true view of the remedial works as opposed to the position it has adopted in the proceeding.
[25] The plaintiffs’ application refers to it making a request of QLDC for further and better discovery which is governed by r 8.19 of the Rules and to QLDC’s obligations under r 8.18.
[26] Rule 8.18(2), set out at [15] above, is not applicable as QLDC has already complied with the order for tailored discovery so it is not “… in the course of complying …” with that order. Rule 8.18(1) however, confirms the continuing obligation on parties to provide discovery. Ms Meechan did not suggest that, if the documents sought existed and were relevant, they would not have to be discovered. Rule 8.19 provides:
8.19Order for particular discovery against party after proceeding commenced
If at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered
1 or more documents or a group of documents that should have been discovered, the Judge may order that party—
(a)to file an affidavit stating—
(i)whether the documents are or have been in the party’s control; and
(ii)if they have been but are no longer in the party’s control, the party’s best knowledge and belief as to when the documents ceased to be in the party’s control and who now has control of them; and
(b)to serve the affidavit on the other party or parties; and
(c)if the documents are in the person’s control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.
[27] Ms Meechan’s challenge to the application was that either the documents sought do not exist or are not relevant.
[28] Counsel referred to the four stage approach usually adopted in considering an application for further and better discovery initially outlined in Assa Abloy New Zealand Ltd v Allegion (NZ) Ltd.1 The four points are:
(a)Are the documents sought relevant, and if so how important will they be (a criterion described as “materiality” in Robert Jones Holdings Ltd v McCullagh)?2
(b)Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence? (But see also Assa Abloy:3 “The threshold embodied in ‘grounds for belief’ is not that high.”)
1 Assa Abloy New Zealand Ltd v Allegion (NZ) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14].
2 Robert Jones Holdings Ltd v McCullagh [2016] NZHC 2529.
3 At [12].
(c)Is discovery proportionate (balancing the time and cost of discovery against the potential value of discovery: Southland Building Society v Barlow Justice Ltd)?4
(d)Weighing and balancing these matters, in the Court’s discretion applying r 8.19, is an order appropriate?
Relevance
[29] The evidence filed on behalf of QLDC is that such notes, memoranda, reports et cetera do not exist and I will return to that point below.
[30] Other than such notes et cetera, Ms Meechan submitted that some of the other documents sought by QLDC might have been relevant if they related to matters in dispute. However, she submitted there was no dispute about the scope of what was applied for by the plaintiffs in their remedial work consent applications, no dispute as to the scope of the consents that were granted and no dispute in respect of the code compliance issued for Block 1 or the information provided in order to obtain code compliance. As there was no dispute about these steps, discovery in relation to those steps is not required.
[31] To meet this submission, Mr Powell submitted that, in respect of those categories of documents identified by Ms Meechan as not being in dispute, such would need to be disclosed to the extent they contained the notes or memoranda already referred to.
The evidence
[32] The plaintiffs filed evidence from its architect that, in the architect’s experience, the documents held by QLDC relating to the remedial works were likely to contain comments, notes or observations by QLDC or its consultants in relation to the purpose and adequacy of the proposed remedial works. Thus, it was submitted there was reason to believe such documents existed.
4 Southland Building Society v Barlow Justice Ltd [2013] NZHC 1125 at [17].
[33] Ms Fletcher is the information and records manager for QLDC. I grant leave for her late affidavit to be read. Responsibly, Mr Powell did not take issue with that leave. Ms Fletcher, in replying to the plaintiffs’ evidence that there may be notes or memoranda made by QLDC’s officers or external consultants, deposed that she undertook a search of QLDC’s documents to identify any of the documents sought by the plaintiffs of the type referred to at [17] above.
[34] Ms Fletcher notes that a number of the documents relating to the remedial works are public documents filed on QLDC’s on-line document portal. She undertook her own search of QLDC’s files for the building consents to identify any documents or emails which were not publicly available on the on-line document portal. She undertook email archive searches using the building consent numbers, the names of building control officers who are involved in the processing of consents and carrying out inspections related to the remedial works and the names the contractors used by the plaintiffs for the remedial works. Ms Fletcher also emailed QLDC’s building control officers to request any other documents or emails they may hold and she spoke with the team leader of the building inspections compliance team to check whether any further lines of enquiry were required.
[35] Mr Fletcher says that from those searches she identified 550 documents which she provided to QLDC’s solicitors for review. That did not include the publicly available documents that can be accessed via the on-line portal. Ms Fletcher says the vast majority of the 550 documents were either produced by or sent to the plaintiffs’ contractors. However, all 550 documents were reviewed by QLDC’s solicitors for their discoverability. All have been provided in hard copy to the plaintiffs.
[36] Ms Fletcher is express that while QLDC does occasionally call on external experts to provide opinions on resource management applications, that is not the case for building consent applications. Her evidence is that the documents sought, as outlined in the plaintiffs’ architect’s affidavit, are either publicly available on the on-line portal, have already been provided, or do not exist.
[37] Mr Powell acknowledged that informal discovery has been provided but submitted the plaintiffs had not provided a complete set of the building consent
documents it held. He said the information provided did not include the documents on the on-line document portal and he questioned the “integrity” of the document portal saying there was no information about what documents on the on-line document portal may contain. That submission begs the question of why the plaintiffs have not reviewed that material. There was some suggestion the plaintiffs cannot be certain it has all documents sent by or to its contractors but again, Ms Fletcher’s evidence is that the vast majority of the documents she identified were either produced or sent to the plaintiffs’ consultants and all material found by Ms Fletcher (other than material on the on-line document portal) has been provided to the plaintiffs.
Decision
[38] The application for further and better discovery is declined. QLDC has demonstrated through its evidence that it has undertaken appropriate searches for documents the plaintiffs suggest may exist. Ms Fletcher’s evidence confirms the key documents sought by the plaintiffs do not exist namely, notes, memoranda and/or reports that may indicate QLDC’s view of the appropriateness of the remedial works.
[39] The remaining categories of documents are not relevant because there is no dispute about the subject matter of those documents. Mr Powell acknowledged as much when he said documents in relation to areas/issues not in dispute would only have to be discovered if they contained notes or addenda of the type previously described.
[40] Of the categories sought, items 1, 7, 8 and 9 will be in the plaintiffs’ possession, available on the electronic on-line document portal, or not relevant.
[41] As to categories 3, 5 and the part of 6 referring to reports from outside parties, Ms Fletcher is express that such do not exist.
[42] As to categories 2, (3 to the extent it includes correspondence with the plaintiffs’ contractors) and 4, such are included in the informal discovery that has already been provided.
[43] Category 10, which is a catchall, will either be covered in the informal discovery given or will be available on the electronic on-line document portal.
[44] Mr Powell submitted that without a list of documents, the plaintiffs do not know if they have a complete set of documents.
[45] Frankly, when it comes to considering whether the discovery sought is proportionate, it is not for QLDC to complete a list of documents to allow the plaintiffs to check that they have all documents it or its contractors created or received in respect of the remedial works. Of course, that leaves to one side that such documents may not relate to matters in dispute and that the plaintiffs have apparently not reviewed the publicly available on-line material.
[46] The focus of oral submissions was on whether QLDC had reports, commentary or the like in respect of the proposed remedial works that would show QLDC’s Consent Officers or QLDC’s Inspectors had expressed views or made notes or the like in respect of the remedial works. Ms Fletcher described the checks she made to ascertain whether such documents existed, and she determined that they do not. In short, there are no relevant documents to list. The remaining documents are not relevant as they do not relate to matters in dispute.
[47] As to the documents held on the on-line document portal, the plaintiffs have a right to inspect those documents as they are public documents. Accordingly, they are under the plaintiffs’ control as well as under QLDC’s control.5
[48]Accordingly, the application is dismissed.
Costs
[49]There is no reason why costs and disbursements should not follow the event
5 The definition of ‘control’ in r 1.3 of the High Court Rules 2016 includes a right to otherwise than under the High Court Rules inspect or copy a document.
on a 2B basis. If no submission on costs (not more than five pages) is filed within five working days of the date of this Judgment, that will be the order as to costs.
Associate Judge Lester
Solicitors:
Grimshaw & Co, Auckland (for Plaintiffs)
Wynn Williams, Christchurch (for First Defendant) Anthony Harper, Christchurch (for Tenth Third Party)
Copy to counsel:
C M Meechan QC, Barrister, Auckland (for First Defendant)
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