Body Corporate 366567 v Auckland Council

[2021] NZHC 1481

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-000716

[2021] NZHC 1481

IN THE MATTER OF

The GORE STREET APARTMENTS also

known as “HARBOUR OAKS”

BETWEEN

BODY CORPORATE 366567

First Plaintiff

AMER LIMITED & ORS
Second Plaintiffs

AND

AUCKLAND COUNCIL

First Defendant

CLARK BROWN ARCHITECTS LIMITED

(In Liquidation) Second Defendant

PM DEVELOPMENTS LIMITED (STRUCK OFF)

Third Defendant

EQUUS INDUSTRIES LIMITED
Fourth Defendant

MAPEI NEW ZEALAND LIMITED

Fifth Defendant

Hearing:

31 May – 1 June 2021

Appearances:

G Illingworth QC, G Lewis and C Zellman for the Plaintiffs

C Meechan QC, C Fairnie and A Lloyd for the First Defendant

Judgment:

23 June 2021

JUDGMENT OF WALKER J

This judgment was delivered by me on 23 June 2021 at 10 am

Pursuant to Rule 11.5 High Court Rules Registrar/Deputy Registrar

BODY CORPORATE 366567 v AUCKLAND COUNCIL [2021] NZHC 1481 [23 June 2021]

AQUASTOP LIMITED

Sixth Defendant

CHARLES NORAGER & SON LIMITED (In

Liquidation) Seventh Defendant

HOLMES FIRE & SAFETY LIMITED
Eighth Defendant

FIREPEL KIDD LIMITED
Ninth Defendant

MACDONALD    BARNETT     PARTNERS LIMITED

Tenth Defendant

HOLMES       STRUCTURES       LIMITED (DISCONTINUED)

Eleventh Defendant

CHENERY CONTRACTING LIMITED
Twelfth Defendant

BROOKFIELD CONSTRUCTIONS	(NZ)	MULTIPLEX LIMITED    (In
Liquidation)
First Third Party

DE BOER WATERPROOFING SOLUTIONS NV (DISCONTINUED)

Second Third Party

Introduction

[1]    This is a building defect case of immense proportions. A 20 week trial is scheduled to commence in May 2022. That is the fourth trial date; the first three trials had to be vacated for lack of readiness. The parties inform the Court that they are committed to retaining the May trial date because of the length of time since the proceeding was first commenced and the importance to the parties of final determination.

[2]    As with any case of this size, a balance has to be struck between imposing discipline upon the proceeding and ensuring all the issues are properly before the Court. The imperative is ultimately to ensure the interests of justice are met. This balancing exercise is particularly acute in a proceeding which has been on foot since 2014 and when the close of pleadings date was 30 November 2018. The plaintiffs sought leave to amend their statement of claim and to serve consolidated expert evidence which included new testing and modelling. The consolidation of multiple briefs for each expert was not challenged. But the first defendant objected to the inclusion of new evidence on various grounds, principally because it is said to recalibrate the case the defendants must meet at a late stage. In a dispute which is first and foremost a contest between experts, the plaintiffs argue that this new expert evidence is critically important because it relates to issues of structural integrity and safety.

[3]    The applications were heard over two days by Associate Judge Bell. In a minute dated 26 February 2021, he made orders permitting the plaintiffs to serve consolidated expert briefs incorporating the new evidence. He also granted the plaintiffs leave to file and serve an amended statement of claim and put in place a timetable for further steps to trial. He set out full reasons for those orders in a subsequent judgment delivered on 12 March 2021.1

[4]    The first defendant (“the Council”) now seeks to review those orders. It alleges the orders are wrong in fact and law because they allow the plaintiffs to advance their case on a different evidential platform to that which the Council had already met in its evidence, served on 30 January 2020.

1      Body Corporate 366567 v Auckland Council [2021] NZHC 491.

[5]    The plaintiffs support the judgment of Associate Judge Bell. They say there are no errors of fact or law and the interests of justice require that the consolidated expert briefs, complete with new evidence, be permitted along with the amendment to the pleading.

Background and procedural history

[6]    The proceeding concerns a building defects claim brought by a body corporate and owners in a 406 unit, 40 level apartment building in Gore Street, Auckland city. The building is commonly known as “Harbour Oaks”. The plaintiffs say the building was constructed with fire, structural, weathertightness and internal moisture defects. Thirteen groups of defects are identified.2 The plaintiffs contend, among other things, that the defective construction arose from negligence on the part of the defendants.

[7]    Building consent for proposed remedial works has now been issued by the Council. The plaintiffs claim damages of approximately $160 million for the cost of the remedial works, together with general damages, interest and costs—a total in excess of $170 million. The plaintiffs had served expert briefs in the period between November 2018 and April 2020 in tranches. This tranche approach appeared to be pragmatic at the time to facilitate readiness for the proposed trial dates. Those briefs were prepared by the plaintiffs in tandem with remedial design and tender processes necessary to obtain the building consent.

[8]    In retrospect, the fragmented approach, compounded by a complicated and drawn out remedial design and tender process, has led to difficulties. The plaintiffs served a total of seven different tranches of expert evidence. Consequently, there was an adjournment of the initial trial fixture. In particular, Lang J who had the carriage of these proceedings as List Judge directed that the plaintiffs serve defect/liability briefs by 30 November 2018; remedial design briefs by 28 February 2019 and quantum briefs by 30 May 2019. He further directed that supplementary evidence as to building consent was permitted within four weeks of consent being issued. At that time, consent was expected to be issued around July 2019 based on the plaintiffs’ advice that they would be applying for such consent by January 2019. As it transpired, building consent was obtained only in January 2021.

2      Schedule 2.

[9]    The plaintiffs served part of its defects/liability evidence by 30 November 2018. The plaintiffs also amended the pleading including as to the quantum previously pleaded. At that stage the quantum was expressed to be “at least $11,308,374”. No updated amount was particularised.

[10]   The plaintiffs were directed to serve outstanding defects/liability evidence by 31 January 2019.3 The plaintiffs then circulated a supplementary brief of evidence of one of the experts and by minute of Lang J dated 8 March 2019, were granted an extension of time to serve remedial design evidence. Further extensions, this time in respect of quantum evidence, were permitted by Lang J on 21 May 2019.

[11]   The plaintiffs then circulated further supplementary briefs of evidence of two experts without seeking leave. They were granted leave to serve the supplementary briefs of evidence of Dr Hyland and Mr Olsen by a minute of Lang J dated 26 July 2019. At the same time, Lang J directed that the plaintiffs are not to serve any further supplementary evidence without leave of the Court. It is worth bearing in mind that at the stage when this minute was issued, there was a 20 week trial scheduled to begin in July 2020.

[12]   The plaintiffs then served quantum evidence between 20 and 22 August 2019. At the same time they amended the remedial quantum to $91.5 million.

[13]   The plaintiffs obtained leave to serve supplementary remedial evidence of  Mr Klosser, Mr Fairhead and Mr Finch on 23 August 2019.4 Gault J further directed that the plaintiffs not serve any further supplementary evidence without leave of the Court which extends to any further evidence including building consent evidence. On 11 October 2019, the trial was moved from February to July 2020. Further timetabling directions were given for plaintiffs’ evidence including updated quantum evidence. On 11 December 2019, Lang J declined to grant the plaintiffs leave to serve supplementary briefs of evidence of Mr Fairhead and Mr Klosser.5 That direction is one of the inter-related sub-issues dealt with by Associate Judge Bell. I return to that issue later in this judgment.

3      Minute of Downs J, 11 December 2018.

4      Minute of Gault J, 23 August 2019.

5      Body Corporate 366567 v Auckland Council [2019] NZHC 3260.

[14]   The  plaintiffs  served  BRANZ  testing  and  remedial  work  evidence  on  20 December 2019, and updated quantum evidence on 2 April 2020.

[15]   By this time, the Council had, unsurprisingly, had enough. It filed a memorandum setting out objections and concerns in respect of the updated quantum evidence, including the fact that it contained supplementary evidence for which leave had not been granted. In a lengthy minute dated 28 April 2020, Woolford J suspended the remaining timetabling orders and vacated the allocated trial fixture as it was apparent that the July trial could not proceed.6 The Council appealed the orders and directions made by Woolford J.

[16]   Materially, the parties then reached an agreement evidenced in an exchange of correspondence (“the 2020 Agreement”). In reliance on the 2020 Agreement, the Council abandoned its appeal. The terms assume some importance in the background narrative so I set out the key provisions:

(a)the plaintiffs would provide their finalised expert evidence in draft “2020”;

(b)the briefs would show all changes; they would consolidate all the previous briefs of the experts and provide notes to show where the content had been taken from earlier;

(c)any new evidence would be identified with an explanation as to why that was not available before;

(d)the Council would have the opportunity to object to any new evidence and if they did, a leave application would be required;

(e)under the arrangement each side reserved their rights to object to new evidence in experts’ briefs.

[17]   Two months later, the plaintiffs circulated 35 consolidated expert briefs of evidence. The Council’s solicitors were unhappy with the explanations for some of the content of those briefs which they considered went well beyond mere

6      Minute of Woolford J, 20 April 2020.

consolidation. According to them, of the 35 “replacement briefs” served, 22 contained new evidence. They raised various concerns with that evidence. The concerns include introduction of evidence in reply to the Council’s evidence when there is no provision for reply evidence; that much of the new evidence relates to new opinions based on further testing and investigation carried out well after the plaintiffs’ primary evidence was exchanged, and in some cases following service of the Council’s evidence. Criticism is also made about the presentation of that evidence. The Council argues that it does not comply with the Expert Code of Conduct or High Court Rules 2016. An inter-related complaint is that  the  “replacement  briefs”  of  Mr  Klosser  and  Mr Fairhead include the evidence for which leave had previously been declined by Lang J.7

[18]   The impasse led to the plaintiffs filing an interlocutory application for leave to serve the consolidated evidence and the following orders and directions made by Associate Judge Bell:

(a)Directing the plaintiffs to serve their proposed consolidated briefs of evidence sent to the defendants on 24 August 2020 except:

(i)The briefs of evidence shall include the additional content and exhibits included in the amended briefs of evidence sent to the defendants on 30 October 2020; and

(ii)The brief of evidence of Dr Hyland shall include the footnote and exhibit set out at paragraph 341 of the plaintiffs’ submissions dated 22 January 2020.

(b)Granting leave to file and serve the amended statement of claim annexed to the affidavit of Janice Wong of 29 September 2020; and

(c)Putting in place a new timetable for further steps to trial.

[19]   The effect of the direction in (a) above was to allow the plaintiffs to serve new evidence being evidence that substantially differs (by way of change or additions) from the plaintiffs’ previous briefs of evidence.

7      Body Corporate 366567 v Auckland Council [2019] NZHC 3260 at [17].

[20]   Although the criticisms of the new evidence are many and varied, at its heart this application for review is about whether the Court should have exercised its discretion to permit that evidence bearing in mind the procedural history, the issues with the evidence and the asserted prejudice to the Council.

The application for review

[21]Broadly, the Council asserts the following errors:

(a)they effectively allowed new evidence as of right—the primary issue;

(b)they allowed new evidence previously declined by Lang J;

(c)the Associate Judge’s approach to the evidence wrongly coloured his approach to the proposed amended pleading; and

(d)the timetable was imposed when those directions were not the subject of applications before the Court.

[22]   Each asserted error raises various sub-issues. Along with setting aside those orders, the Council seeks orders declining the plaintiffs’ interlocutory application dated 29 September 2020 to the extent it sought leave to file further evidence (as part of the filing of consolidated briefs) and to file a further amended statement of claim.

The decision

[23]I begin with the decision by Associate Judge Bell.

[24]   The Associate Judge surveyed the procedural history. He identified several features of that history which he saw as providing the backdrop to the plaintiffs’ application. Namely that the Council had pressed for an early hearing against opposition by the plaintiffs and that the plaintiffs cannot afford the costs of repairs but are going to trial on estimated costs. The Associate Judge saw some strategic advantage for the Council to go to trial on incomplete information as “uncertainty is likely to play in its favour”.8

8      Body Corporate 366567 v Auckland Council [2021] NZHC 491 at [5].

[25]He referred to:

(a)the observations of Fogarty J in 2017 when setting the case down for hearing in the second half of 2019 and the intimation that the trial might need to be vacated if new information came to hand from the ongoing work of the quantity surveyor’s expert consultants and market responses to tenders;9

(b)the adjournment granted by Lang J on 11 May 2018 who rejected submissions by the defendants that the experts should not take a linear approach but should assemble some aspects of the plaintiffs’ case simultaneously and quantum evidence through a quantity surveyor rather than by obtaining tenders and a building consent;

(c)the late discovery provided by Homes Fire & Safety Ltd (having only recently been restored to the case) which showed that Holmes had prepared an alternative design solution for the structure but the construction did not follow the design;

(d)the dismissal by Lang J on 11 December 2019 of the application by the plaintiffs to file supplementary briefs to avoid prejudicing the Council when the trial was scheduled to commence in July 2020;

(e)the sheer volume of evidence served by the plaintiffs, including 110 briefs served on 2 April 2020, of which 10 were expert briefs and showed a massive increase in the losses claimed as a result of changes in design and scope of repairs.

[26]   The Associate Judge dealt first with the application to amend the statement of claim as that would guide the application to replace the expert briefs. The revisions to the statement of claim add tens of millions of dollars to the damages claimed but the Council did not object to those amendments.10 The focus is on the schedule of defects. In particular, the addition of “B1” to the third column on the second row of

9      See Body Corporate 366567 v Auckland Council [2017] NZHC 1520, (2017) 23 PRNZ 569 at [47].

10     The judgment records an apparent acceptance by Council that there may yet be further amendments to the quantum closer to trial.

Schedule 2 of the statement of claim. This column identifies those parts of the building code in issue for particular alleged defects. The defect at issue is an allegation that the fire separation walls are not constructed to maintain the integrity of the walls in a fire. B1 references structural failure.

[27]   He referred to the clear purpose of the close of pleadings date—to enable the parties to concentrate on preparing for hearing and the principled approach to leave applications after that date set out in Oraka Technologies Ltd v Geostel Vision Ltd.11 He specifically referred to the required balancing exercise between proper compliance with procedural requirements and ensuring that a case is justly determined.12

[28]   The Associate Judge recognised that the proposed amendment introduces a new issue but determined that it would ensure the real matters in controversy will go to trial; the 20 months’ notice prior to trial gave the defendants adequate time in which to respond and so did not prejudice them; and the amended pleading was not unsound under any pleading requirements. Under a “normal” approach, those conclusions would mean there was no reason to refuse leave.

[29]   However, then (and before this Court), the Council argued that there is no evidence to support the new allegation because the Court should not allow replacement of the expert briefs with new evidence, including evidence relevant to this new issue. The Associate Judge rejected this argument, on the basis that it “puts matters back to front” because the soundness of pleadings does not turn on the adequacy of evidence to prove them.13 Rather, a pleadings decision goes to whether the party should be given the opportunity to prove the matters they wish to put in issue.

[30]   The Associate Judge then turned to the more substantive part of the application. He recognised that some of the proposed changes to briefs of evidence are substantial.14 He focussed on the brief of Dr Hyland, a structural engineer. The brief is 154 pages long, with 487 paragraphs. He identified significant insertions or new evidence dealing with new modelling and tests.15 It is readily apparent that the significance of the new evidence was not lost on him. He said that “[t]aken together

11     Oraka Technologies Ltd v Geostel Vision Ltd [2015] NZHC 991 at [17].

12     Body Corporate 366567 v Auckland Council [2021] NZHC 491 at [26] citing Whakatane District Council v Bay of Plenty Regional Council [cross-examination] (2008) 19 PRNZ 91 (HC) at [10].

13 At [31].

14     At [1] and [3].

15 At [34].

[the experts’ briefs] present a large amount of new information for the defendants to deal with.”16 He particularly identified that some of Dr Hyland’s new evidence is relevant to the new pleaded issue and the rest of his new evidence is about matters already in issue.

[31]   Associate Judge Bell identified that there is no rule in the High Court Rules that deals with service of fresh briefs when the time for serving briefs has passed. He rejected the Council’s proposal that it be dealt with under r.9.8—supplementary briefs—because the proposed briefs were not supplementary but took the place of earlier briefs and there was not yet a “trial judge” appointed to exercise the required discretion as to the acceptance and use of such briefs.17

[32]   He referred to the objective and scope of pt 9 of the High Court Rules dealing with evidence, the general objective under r 1.2 to secure the just, speedy, and inexpensive determination of any proceeding and r 9.7 dealing with the requirements in relation to briefs. He posited that the plaintiffs were in reality asking for the Court to fix a fresh date for replacement briefs to be served. He then drew an analogy with amended pleadings after the close of pleadings date. He described the test accordingly as being whether the parties have every opportunity to ensure the real controversy goes to trial weighed against the risk of serious prejudice to the other parties and avoiding delay.

[33]   Identifying that the general approach is to let each side give as much evidence as it wants to make out its case, he said:18

… it is understandable that the plaintiffs’ experts have continued their inspections, investigations, modelling and testing to check the results against the evidence they have already given, to modify their evidence, to bolster it, add to it and to head off anticipated objections, all to make their evidence sounder and less vulnerable to challenge. In principle there is no reason why the court should not receive that evidence. It would be awkward to leave that evidence out of briefs and to see what might come during the trial. Imagine cross-examination where an expert has read the version of his brief served in late 2019/early 2020 without new information. They are cross-examined on an area the defence considers weak, but the expert responds with information about further investigations since the initial brief. The defence is taken by surprise, having only just learnt about it. The judge will wonder why this information has been kept under wraps. As the information is likely to be technical and detailed, it may be difficult to convey orally.

16 At [35].

17 At [36].

18 At [45].

[34]   He dismissed the Council’s argument that the evidence could have been given earlier and therefore should not be allowed now as a punitive approach. He stated this was beside the point since there may be explanations for some of the evidence not coming in earlier. He identified the staged approach to service of briefs as one explanation—the need for modification arose as inquiries progressed and remedial designs worked out.19 He considered the fractured or staged approach attributable to the Council’s insistence on an early hearing. Another explanation for some but not all of the changes was the late discovery of documents by Holmes Safety & Fire Ltd.

[35]   He emphasised the Court’s focus on seeing a just determination of the case with each side given a proper opportunity to present their evidence and that this goal would be met provided there was a reasonable opportunity for the defendants to respond to the evidence.

[36]   As to the objections about the new evidence, Associate Judge Bell separated out the objections to the water penetration tests from Messrs Fairhead and Klosser and the quantity surveyor evidence from Mr White from the objections to the presentation of some of the evidence. He determined that an interlocutory application for leave was not the place for a line by line assessment of the admissibility of each item of new evidence since there was a procedure under r 9.11 for that.20 Rather, a decision about whether to allow the new briefs generally was required.

[37]   Dealing with the Council’s argument that when Lang J declined to permit supplementary briefs from Messrs Fairhead and Klosser, the effect was to prevent the plaintiffs from serving any further briefs at all from that point, Associate Judge Bell observed that the Council was taking Lang J’s decision out of context.21 Lang J’s general comment “that the time had well and truly passed” had been overtaken by procedural events since. More pertinent however was the effect of Lang J’s ruling on the quest to now serve the new Klosser and Fairhead evidence.

[38]   He referred to r 7.50. This rule applies to an order or direction that relates to the management of a proceeding and has been made by a Judge in chambers. It permits a Judge to vary the determination on application if there has been a change in

19 At [50].

20     The Associate Judge determined that the 20 day period for challenging the admissibility of the brief, in whole or part, was to run from the date of his decision.

21 At [58].

circumstances affecting a party or the party’s solicitor or counsel. The change in circumstance was the fact that there was no longer a fixture in July 2020 so the Council was no longer prejudiced. Consequently there was no bar merely by dint of Lang J’s decision.

[39]   The objection to Mr White’s evidence was that parts of his brief were non- compliant with the code of conduct for expert witnesses. The Associate Judge said that he was not in a position to assess whether the most recent brief met the requirements of s 25 of the Evidence Act 2006 and whether the alleged non- compliance with the code should led to exclusion. Rather, he said that the plaintiffs are on notice as to the challenge, have the opportunity to address it, and are “aware of the risks if they do not”.22

[40]   Another factor supporting leave was the requirement that expert witnesses give their opinions at the time of their evidence at trial and in the light of all the relevant information they hold. If they were not able to include in their evidence any references to later tests and investigations carried out, their evidence would be non-compliant with the code of conduct.

[41]   Finally, the Associate Judge noted that the Council did not give any evidence as to prejudice it would suffer from service of the new briefs. It could not say that it had been taken by surprise as it had these briefs since August 2020. It had clear time in which to prepare responses including carrying out further inspections, investigations and modelling and six months should be long enough to allow for the greater complexity of this case. The time to trial leaves space for extensions if properly required.

[42]   In conclusion, the Associate Judge allowed replacement of the briefs to secure a just determination with any prejudice to the defendants capable of being addressed by costs after trial.

[43]   On timetabling, Associate Judge Bell largely adopted the plaintiffs’ proposals but extended the time for the defendants to serve their briefs. He specifically said:23

22 At [64].

23 At [72].

Those directions are not set in concrete and may be reviewed. See r 7.50. In particular the defendants’ reasonable requests for more time to prepare their defence briefs will be considered.

The approach on review

[44]   This review application is made under s 26P of the Judicature Act 1908 and the former r 2.3 because the proceeding was commenced before the coming into force of the Senior Courts Act 2016.

[45]   It is common ground that the onus is on the Council to show that the Associate Judge’s decision rested on insupportable findings of fact or applied wrong principles of law.

Issue one: was the Associate Judge wrong to permit amendment to the statement of claim?

[46]   Ms Meechan QC submits that his Honour misunderstood the Council’s position on leave to amend the pleadings. The crux of the Council’s submission as to the inter-relationship between the two applications is that the proposed amendment was not supported by the plaintiffs’ previous evidence and therefore required new evidence. It would follow that the proposed amendment would not bring the pleading into line with the evidence (which often justifies a late amendment to pleadings). Further, that it is wrong to suggest that cross-examination of defence witnesses may enable the plaintiffs to prove the new allegation as that overlooks the definition of evidence-in-chief in s 2 of the Evidence Act.

[47]   I reject the submission that Associate Judge Bell erred when he permitted the amendment to the statement of claim. His decision was orthodox in its assessment of the paramount consideration (to ensure that the real controversy goes to trial to secure the just determination of the proceeding); delay or prejudice and the overall justice. As to consideration of the merit of the amendment (being the fourth of the Oraka principles), the complexity of these proceedings makes any sensible review at an interlocutory hearing practically hopeless. It is unnecessary to analyse the relationship between s 2 of the Evidence Act and the ability of a plaintiff to make out its case on cross-examination as this was not a material factor in the Associate Judge’s decision.

[48]I therefore dismiss this aspect of the application for review.

Issue two: did the Associate Judge err when he directed service of the consolidated briefs including the new evidence?

Challenge to the overall approach by the Associate Judge

[49]   The Council’s challenge is three-pronged. First, Ms Meechan criticises the overall approach. She highlights the Associate Judge’s statement at [45] of the judgment that there is no reason in principle why a court should not receive evidence from new inspections and investigations. She submits this is a serious departure from established law because it endorses an iterative approach to plaintiff evidence which seriously disadvantages defendants. If the statement went this far, or was a statement of general principle, then Ms Meechan’s submission is well made. But it did not and was not. It must be read and understood in the context of this particular case and its circumstances. It does not represent support for, let alone a rule for, an unconstrained iterative process for evidence as a general rule.

[50]   Nor does it suggest that no explanation is required for the new evidence. The Associate Judge referred to the requirement to seek leave to serve evidence out of time as sufficient to discourage parties from keeping their powder dry by putting up a bare bones case at  the  outset  and  giving  the  real  substance  of  their  case  later.  As Mr Illingworth QC submitted, the plaintiffs did provide explanation for some of the new evidence. Dr Hyland deposed:

The defect investigation, remedial design and performance issues which arise in relation to this building are interlinked and complex. I did not complete my remedial design work until April 2020 and the fire engineers were still completing their work at about that time (see paragraphs 19–24 of the consolidated brief of evidence of David Klosser). It is not surprising to me that upon completion of all of this work and given an opportunity to present our evidence in single consolidated briefs, both Mr Olsson and I have identified issues that did not occur to us previously.

[51]   The next asserted error in approach was his Honour’s treatment of the situation as analogous to amended pleadings rather than as an application to serve supplementary briefs. On this point, I depart from the Associate Judge.

[52]   The plaintiffs’ application was expressly under r 9.8 because there is no specific rule for the replacement of consolidated briefs.24 The rule provides that “[t]he acceptance and use of the supplementary brief in court will be at the discretion of the

24     It also relied on rr 7.43, 7.6 and 7.7 of the High Court Rules 2016.

trial Judge.” The Associate Judge considered that as he was not the trial judge, the rule was not applicable. I accept however that this is a supplementary brief situation. This evidence is supplementary to the extent that it is served after the defendants’ responsive evidence.25 Even if the Associate Judge is technically correct, the principles of r 9.8 are more apposite than the approach to pleadings. The 2020 Agreement between the parties preserved the ability to seek leave to serve supplementary evidence, thus the parties themselves envisaged the application of r 9.8. Of course, the 2020 Agreement is not determinative; the Court has to be satisfied of the proper approach itself but that factor is one which informs the exercise of any discretion.

[53]   In the end however, this difference in approach is not material. The Court has a wide discretion to allow supplementary evidence. The touchstone will be the interests of justice.26 The relevant principles were crisply summarised in the recent decision of Doogue J in Body Corporate 384825 v Queenstown Lakes District Council:27

[32]      The Court is given a wide discretion under r 9.8 to allow supplementary written statements to be accepted and used. The following principles guide the exercise of the discretion:

(a)Leave will necessarily depend on the particular facts and circumstances of the case.28

(b)A balancing of where the overall justice of the case lies is required, weighing the prejudice to the party that served the supplementary brief if leave is reserved against that to

other parties if leave is granted;

(c)The fact that the supplementary brief improves the evidential case of the party seeking to offer it is not, without more, a basis for refusing leave;

(d)The prejudice may be especially significant where the supplementary brief is provided at a late stage in the proceeding;

(e)Granting an adjournment to allow more time to respond

and/or ordering costs that reflect the extra work required in responding to the supplementary evidence may minimise prejudice resulting from a grant of leave;

25 If the new evidence related to quantum or remedial issues on which the Council had yet to respond, then I would be more inclined to view the application as one to vary a timetable for provision of evidence.

26     Western Park Village Ltd v Baho [2013] NZHC 1909 at [12].

27     Body Corporate 384825 v Queenstown Lakes District Council [2021] NZHC 1207 at [32].

28     Signal v Berry [2016] NZHC 1126 at [24].

(f)The effect on public resources if a trial needs to be vacated due to the supplementary evidence being provided at the last minute.29

(g)To the extent that further evidence is a response to evidence adduced by the defendants, the plaintiff is entitled to provide that further evidence orally.30

(h)Leave to adduce further evidence that improves a party’s position may be allowed if the trial date is a sufficient time away.

Content and presentation of the supplementary evidence and interests of justice

[54]   The second prong to the challenge focuses on the content and presentation of the briefs themselves. Ms Meechan points to significant problems with the briefs in support of the submission that the interests of justice are not served by the grant of leave. She submits that the new evidence:

(a)comprises, in part, reply evidence (or wider responsive evidence) directed at responding to the briefs served by the Council when there was no timetable for reply evidence and such briefs are not permitted;

(b)is non-compliant with the High Court Rules, Evidence Act and code of conduct because:

(i)the witness fails to set out the facts on which the expressed opinion is based and reasons giving rise to the opinion;

(ii)the new material in the briefs is neither digestible nor comprehensible to the Court—therefore not substantially helpful to the Court; and

(iii)the witnesses make conclusory statements and bare references to other documents purporting to set out results of analyses (the evidential status of which is unclear) and in some instances run to multiple pages making the task of review “truly gargantuan”; and

29     Body Corporate 354085 “Perspective Apartments” v Auckland Council [2016] NZHC 200 at [9].

30     Currie v Goodwin HC Auckland CIV-2002-404-001820, 27 August 2004.

(c)raises practical issues as to how it will be dealt with at trial, whether read out orally or otherwise, if the witnesses’ substantive evidence includes the content of a referenced judgment.

[55]   Mr Illingworth points out that the Council did not raise any objection to the particular practice of supporting opinions by exhibiting analyses, calculations and other material in their defects and liability evidence in November 2018 or following any of the subsequent tranches. He referred to examples such as where the Council objects to Dr Hyland exhibiting the plaintiffs’ application for building consent submitted to the Council in July 2019 in his consolidated brief. The document was however first exhibited to the brief of evidence of David Klosser, served in August 2019. He further submits that the objective of exhibiting the supporting material is in fact to comply with obligations under clauses 3(d)–(g) of the code of conduct for expert witnesses. Those clauses require that the expert witness must:31

(d)state the facts and assumptions on which the opinions of the expert witness are based;

(e)state the reasons for the opinions given by the expert witness;

(f)specify any literature or other material used or relied on in support of the opinions expressed by the expert witness;

(g)describe any examinations, tests, or other investigations on which the expert witness has relied and identify, and give details of the qualifications of, any person who carried them out.

[56]   He points to the well-established practice for expert witnesses to include material of a more technical nature by way of exhibiting the material to their briefs. He clarified that it is necessary to consider the evidence in both the brief and the exhibit to which it refers and that the opinion in terms of the requirements of s 25 comprises both elements. A particularly apposite point he makes is:

The witness is [not] required to explain every aspect of the underlying work in his or her evidence. To do so in this case could effectively require a full dissertation of the theory in practice underlying the fields of fire and structural engineering and detailed descriptions of the workings of computer modelling in these fields.

[57]   Ms Meechan’s complaint about the inclusion of reply evidence is valid to a point. Cases such as SCC (NZ) Ltd v Samsung Electronics New Zealand Ltd and Body

31     High Court Rules, sch 4 cl 3.

Corporate 354085 “Perspective Apartments” v Auckland Council traverse the reasons why reply evidence is not catered for in the rules.32 The standard process for a civil trial is for briefs of evidence to be served in advance and that further responses or replies should await the hearing and testing of oral evidence at trial.33 In particular, evidence which anticipates possible lines of cross-examination is not proper. Rather, such evidence can be given at the time of cross-examination.34 A defendant’s evidence is to be tested through cross-examination, and not by denial, argument, or repetition in reply from the plaintiffs’ witnesses.35

[58]   On the other hand, I accept the unworkability of having the plaintiffs’ experts disregard any views formed or analyses undertaken after reading the defendant expert evidence. The difficulty of dealing orally with complex computer modelling information cannot be underestimated.

[59]   However, like the Associate Judge I consider that is an issue for another day. It is beyond the scope of an application for leave to serve supplementary evidence, in the context of this case. The primary reason is that its inclusion does not recalibrate the case so far as preparation of defence evidence is concerned. It does not create the type or sort of prejudice which informs the interests of justice. It is not therefore a factor which goes to the true inquiry before this Court.

[60]   In careful and comprehensive submissions, Ms Meechan took me through a sample of the supplementary evidence of Dr Hyland to illustrate the asserted non- compliance with the rules of evidence and procedure. Counsel invited me to extrapolate from the samples as part of my assessment of the interests of justice.

[61]   Even a brief foray into the substance of this material illustrates the difficulties faced by the Court in a pre-trial stage. For example, Dr Hyland’s evidence in relation to defect 1 is contained at paragraphs 78 to 200 of his consolidated brief. Paragraphs 193 to 195 describe structural modelling he undertook in 2019 to assess the effects of fire on the steel work in the stairwell and lift shaft. I understand the objective of this modelling is to verify whether coatings to be applied for remedial work purposes

32     SCC (NZ) Ltd v Samsung Electronics New Zealand Ltd [2018] NZHC 2780 at [206]; and Body Corporate 354085 “Perspective Apartments” v Auckland Council [2016] NZHC 200 at [8].

33     Body Corporate 354085 “Perspective Apartments” v Auckland Council [2016] NZHC 200 at [8].

34 At [10].

35     SCC (NZ) Ltd v Samsung Electronics New Zealand Ltd [2018] NZHC 2780 at [206].

would  comply  with  the building code.    Dr Hyland describes the results of these analyses. He says at paragraph 193:

In 2019 I asked Olsson Fire to provide calculations for localised fire scenarios in the stairwell and lift shaft, for the purposes of verifying whether proposed coatings to be applied for remedial work purposes would comply with the building code. Olssen Fire provided this information in Design Advice DA001 dated 4 February 2019 [GOR.03.07098]. I modelled the effects of these fires on the unprotected steelwork in the stairwell and lift shaft (amongst other things) using Abaqus and Prokon. The results of these analyses are set out in the document submitted for building consent in July 2019 at [GOR.03.00378 at 293-3001 [[GOR.03.00378 at 3002-3069]].

[62]   I read the paragraph as referencing two documents—the Design Advice document dated 4 February 2019 (comprising 26 pages) and 45 out of 5,938 pages of the document submitted for building consent in July 2019. Ms Meechan has a range of complaints about this material including that the models referred to are not in evidence and not discovered; the material lacks sufficient explanation; the defendant does not have the Abaqus files referred to and discovery document numbers are not referenced so the solicitors must go on a hunt for the documents. In short, the superficial brevity of the new paragraphs belies a cascade of complex documentation, the status of which is at least opaque.

[63]   In response, Mr Lewis contends that the document was submitted to the Council in July 2019 and exhibited to the brief of David Klosser served 23 August 2019 and the Design Advice document is on page 3044 of the building consent application served August 2019; the Abaqus 2018 model has been provided, being included in GOR.03.00378 and therefore exhibited to the brief of Mr Klosser. He adds that to the extent there are any electronic input files not provided, these have not previously been requested and are not ordinarily provided by structural engineers in addition to the model (being merely the coding which produces the model images). However, he submits that when the Council has requested electronic input files, the plaintiffs have responded promptly and will continue to do so. He also takes issue with the contention that any referenced documents are incapable of being understood or are unexplained.

[64]   I am acutely conscious of my necessarily limited appreciation of the evidence given its volume and technical complexity. Ultimately, the trial Judge will be immersed in the detail and will be much assisted by other relevant expert evidence and joint statements prepared by the experts following the experts’ conferences. It is well

accepted that whether expert evidence is substantially helpful is an amalgam of relevance, reliability and probative value.36 It is also well understood that on the totality of the evidence, some expert opinion will assume materially greater significance and probative value than it might in isolation.37

[65]   It may be that any weaknesses in the evidence pinpointed by Ms Meechan will lead to the trial judge preferring the evidence of opposing experts or determining parts of it inadmissible. For instance, it may be that sections of the evidence will have little weight because the witnesses do not sufficiently explain the nature of the evidence and its relationship to the documents relied on. But the problem of seeking to rely on these arguments in the context of an application for leave to serve supplementary evidence is the inherent difficulty of fully appreciating the import of the technical evidence when not immersed in that evidence. And, as matters stand, I see no reason to be concerned that the defendants’ experts cannot understand this new evidence. There is no evidence before me from those experts.

[66]For these reasons, I consider Associate Judge Bell was correct to say that:38

This is not the place for a line-by-line assessment of the admissibility of each item of new evidence. A decision is required whether to allow the new briefs generally.

Effect of previous orders declining leave to file particular supplementary evidence

[67]   The third prong to the Council’s challenge relates to orders made by Lang J declining leave to serve supplementary evidence of David Klosser and Richard Fairhead.39 I am told that the replacement briefs include some but not all of the evidence included in the supplementary briefs for which leave was declined.

[68]   By way of context, both witnesses have already served an initial brief of evidence and a supplementary brief of evidence. The replacement briefs include material relating to water penetration tests carried out on joinery from the apartment complex in September 2019. The plaintiffs wish to use this evidence to support their

36     Pora v R [2015] UKPC 9, [2016] 1 NZLR 277 at [41].

37     The Minister of Education v Carter Holt Harvey Ltd [2020] NZHC 1539 at [12]–[13] citing Cridge v Studorp Ltd [2020] NZHC 794.

38     Body Corporate 366567 v Auckland Council [2021] NZHC 491 at [56].

39     Body Corporate 366567 v Auckland Council [2019] NZHC 3260 at [19].

claim that the joinery will need to be replaced rather than reinstated. Lang J declined leave in these terms:

[16]      The Council objects to leave being granted on the basis that the time has come for the plaintiffs to cease serving supplementary evidence. The Council also contends it will be prejudiced in preparing for trial if it is now required to answer the material contained in the latest briefs of evidence.

[17]      I uphold the Council’s submission on this point. I consider the time has now well and truly passed for the plaintiffs to serve further briefs of evidence of this type.

[18]      The Council will no doubt be aware, however, that this may not be the end of the matter. If it calls evidence at trial to challenge the plaintiffs’ stance regarding the unsuitability of the joinery for re-use the plaintiffs are likely to be able to put the water penetration test results to the Council’s witnesses in cross-examination. As I understand the position the Council’s experts were present when the testing was carried out so I see no basis on which it could object to that being done.

[69]   It is worth repeating that at the time of Lang J’s order, the trial was seven months away, which included the Christmas/New Year period. By contrast, when Associate Judge Bell delivered his judgment the trial was over 16 months away.

[70]   Ms Meechan submits there was no entitlement to effectively  “overturn” Lang J’s determination and that the Associate Judge’s reliance on r 7.50 was misplaced. That rule gives an option only to direct that the application to vary a determination be heard by way of review or appeal unless an application is made by a party. I disagree.

[71]Rule 7.50 provides:

7.50  Order relating to management of proceeding may be varied if circumstances change

(1)This rule applies to an order or direction (a determination) that—

(a)relates to the management of a proceeding; and

(b)has been made by a Judge in chambers.

(2)If there has been a change in circumstances affecting a party or the party’s solicitor or counsel since the making of a determination, a Judge may, on application, vary the determination.

(3)Despite subclause (2), a Judge may, on application or on the Judge’s own initiative, direct that—

(a)an application under subclause (2) to vary a determination made by an Associate Judge in chambers be heard as a review

of an order made by an Associate Judge in chambers under section 26P of the Act and these rules:

(b)an application under subclause (2) to vary a determination made by a Judge in chambers be heard as an application under rule 7.49(1) or be transferred to the Court of Appeal.

[72]   Clearly the rule applies to orders or directions relating to the management of a proceeding. An application for leave to serve supplementary evidence relates to the management of a proceeding. Rule 7.50(3) does not limit a Judge to taking either of the two steps in (3)(a) or (b). A Judge may, on application, vary the determination. The only impediment in the present circumstances is that the plaintiffs did not make an application under r 7.50 (either in their application or orally) but orally relied on   r 7.52. But, in substance, the application was to vary an order relating to management of a proceeding. In my assessment, such a strict approach, limiting the Judge to a determination under (a) or (b) if on his or her own initiative, would be an overly pedantic approach.40

[73]   It follows that the previous orders made by Lang J are not an obstacle to granting leave to serve this supplementary evidence if it is in the interests of justice to do so. To put it colloquially, merely because enough was enough in 2019 does not mean that an application to adduce evidence in 2021 should not be entertained when the timing considerations are significantly different. Associate Judge Bell did not “overrule” or ignore Lang J’s directions. He varied them because of the change in circumstances. I agree with his approach and conclusion.

Issue three: timetabling

[74]   I accept that the Council needs a reasonable time to prepare its responsive evidence and that the current timetable directed by Associate Judge Bell may not provide this. The Associate Judge himself recognised the timetabling directions are flexible and may need adjustment.

[75]   In the first instance, I direct the parties to confer to endeavour to agree a workable timetable which provides sufficient time for the experts to consult well

40 I note the commentary to r 7.50 in Robert Osborne (ed) McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR7.50] which suggests that there appears to be a consequential amendment to r 7.50(3) missing from sch 1 of the Senior Courts Act 2016, as s 26P of the Judicature Act 1908 has been repealed and there is no equivalent in the Senior Courts Act. Rule 7.50(3) therefore appears to be redundant.

before trial and certainly before the end of February 2022. If agreement is not possible, I will arrange either a telephone conference or a face to face conference for the purpose of setting that timetable. That conference is to take place in the week of 29 June 2021. I direct the Registry to arrange a conference in the week of 5 July 2021.

Conclusion

[76]   The procedural history, perceived non-compliance with the 2020 Agreement and issues with the briefs have led to an understandable degree of frustration for the Council. However, its approach tends toward a punitive one. While discipline and rigour is required in the management of complex litigation, it cannot be at the expense of justice. I find no error in the orders made by Associate Judge Bell but am prepared to extend the timetabling directions made by him.

[77]   It follows that I dismiss the application and decline to make the orders sought by the Council except to the extent of a varied timetable, in respect of which I make the directions in [75] above and the following directions designed to overcome certain practical issues:

(a)The plaintiffs are to provide the document numbers of the documents referred to in the “new evidence” and pdf version copies of those documents within 21 days of this judgment.

(b)To the extent the documents in (a) have documents embedded within them, the plaintiffs are to provide the discovery number and pdf version copies of those documents within 21 days of this judgment.

(c)The parties have further leave to apply.

Costs

[78]   My provisional view is that the respondents to this application are entitled to costs in the ordinary course. If costs cannot be agreed between the parties, a memorandum may be filed within 21 days, with responsive memorandum within a further 14 days.

[79]   In each case, memoranda should be no longer than four pages exclusive of costs schedules.

............................................................

Walker J