Body Corporate 366567 v Auckland Council

[2021] NZHC 491

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-716

[2021] NZHC 491

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 & ORS

First Defendant

CLARK BROWN ARCHITECTS LIMTIED (IN LIQUIDATION)
Second Defendant

………………continued overleaf

Hearing:

17 and 18 February 2021

Appearances:

Grant Illingworth QC, Gareth Lewis and Sarah Zellman for the Plaintiffs

Stephen Price, Charlene Fairnie and Aaron Lloyd for the First Defendant
No appearances for other parties

Judgment:

12 March 2021

REASONS FOR JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:

This judgment was delivered by me on 12 March 2020 at 4:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Grimshaw & Co (Gareth Lewis/Sarah Zellman), Auckland, for the Plaintiffs
MinterEllisonRuddWatts (Stephen Price, Charlene Fairnie, Aaron Lloyd), Auckland, for the First Defendant

Copy for:

Gr ant Illingworth QC for the Plaintiffs

BODY CORPORATE 366567 v AUCKLAND COUNCIL & ORS [2021] NZHC 491 [12 March 2021]

P M DEVELOPMENTS LIMITED

(struck off)
Third Defendant

EQUUS INDUSTRIES LIMITED
Fourth Defendant

MAPEI NEW ZEALAND LIMITED
Fifth Defendant

AQUASTOP LIMITED
Sixth Defendant

CHARLES NORAGER & SON LIMITED (IN LIQUIDATION)

Seventh Defendant

HOLMES FIRE & SAFETY LIMITD
Eighth Defendant

FIREPEL KIDD LIMITED
Ninth Defendant

MACDONALD BARNETT PARTNERS LIMITED

Tenth Defendant

HOLMES STRUCTURES LIMITED

Eleventh Defendant (DISCONTINUED)

CHENERY CONTRACTING LIMITED

Twelfth Defendant

ZURICH AUSTRALIAN LIMITED
Thirteenth Defendant

AND  BROOKFIELD MULTIPLEX

CONSTRUCTIONS (NZ) LIMITED (IN LIQUIDATION)

First Third Party

DE BOER WATERPROOFING SOLUTIONS NV

Second Third Party

RESERVED JUDGMENT OF ASSOCIATE JUDGE R M BELL

[1]    The close of pleadings date has passed. So has the date by which the plaintiffs were to serve their evidence. The plaintiffs want to file an amended statement of claim and to replace their experts’ briefs with new ones, some with substantial changes. In my minute of 26 February 2021, I allowed the plaintiffs’ applications. I now give my reasons.

[2]    This is a building defects case. The plaintiffs are the body corporate and owners of the Harbour Oaks apartment building in Gore Street in the Auckland CBD. It is slim 40 storey tower on a podium built between 2004 and 2006. A code compliance certificate was issued in October 2006. According to the current statement of claim, there are 13 groups of defects going to weather-proofing and water ingress, fire safety, and structural weaknesses related to seismic and fire risks. The defendants are the Auckland Council, engineering consultants, architects, waterproofing and other contractors. Only the council has opposed the plaintiffs’ application.

[3]    This is one of the larger building defects cases involving a single building. The plaintiffs’ proposed statement of claim seeks damages of $161 million. The cost of remedial work is estimated at $131 million. At the start of the proceeding in 2014, the plaintiffs’ claim was for a more modest $11 million. Since then, the plaintiffs’ experts have been investigating defects, testing, modelling, developing remedial solutions and revising costs. The plaintiffs’ case is that with greater knowledge of the defects, the scope and cost of repairs has gone up. While experts’ briefs have already been served, investigations and modelling have continued. The quantity surveyors have been revising the cost of repairs. The plaintiffs wish to put in evidence further information that has come to hand since the date when their evidence was due. The plaintiffs want to change the evidence of their experts. While some changes are minor, others are substantial.

[4]    The close of pleadings date was 30 November 2018. The last day for the plaintiffs to serve their briefs was 30 March 2020.   The case will be heard over     20 weeks beginning in May 2022. As the plaintiffs applied after the close of pleadings

date, they required leave under r 7.7(1) of the High Court Rules 2016, but that was not opposed.

Background

[5]    Some procedural history is required. One feature is that the defendants, especially the council, have pressed for an early hearing, whereas the plaintiffs have resisted, saying that they need time to prepare their case thoroughly. The plaintiffs cannot afford the costs of repair but will go to trial on estimated costs. For them it is critical that they get the scope of repairs and costs right, lest they do not recover enough to fund the repairs.1 Correspondingly it suits the council for the case to go to trial on incomplete information as the uncertainty is likely to play in its favour.

[6]    In July 2017 Fogarty J heard the council’s opposed application for a fixture. He set the case down for hearing in the second half of 2019 for 20 weeks. In opposing, the plaintiffs said that they still had work to do to complete their investigations, design the remedial works and obtain tenders. Fogarty J considered that there would be enough time to do that, although he left open the possibility that the trial might need to be vacated. He said:2

For these reasons I think the best way of pursuing the objective of the High Court Rules is to set this case down now for trial in the third or fourth quarter of 2019, conscious that from time to time this Court will need to grant leave for amendment of particulars of the statement of claim; arising out of new information to hand from the ongoing work of the quantity surveyor’s expert consultants and the market responses to tenders, and possibly, but hopefully not, the High Court might agree to vacate the trial if it becomes apparent that a just trial is not possible.

[7]    On 11 May 2018 Lang J granted the plaintiffs’ opposed application to adjourn the fixture to begin in July 2019. He accepted their submissions that they needed more time to prepare their case. The preparation would include peer reviews of fire reports, completing detailed remedial designs, applying for a building consent, seeking tenders and completing a tender process. The plaintiffs anticipated completing that by September 2019. He rejected the defendants’ submission that the plaintiffs’ experts

1      See Body Corporate 348047 v Auckland Council [2019] NZHC 1738, (2019) 20 NZCPR 499 for more on the risk.

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

should not take a linear approach, that some aspects of the plaintiffs’ case could be assembled simultaneously, and the plaintiffs could establish quantum through a quantity surveyor rather than obtaining open tenders and a building consent.

[8]    A new fixture was  set  for  February  2020  for  20  weeks.  The  case  kept 30 November 2018 as its close of pleadings date. Fresh timetable directions were given for the exchange of evidence: the plaintiffs by 30 May 2019, the defendants by 30 August 2019 and third parties by 25 October 2019. There was also provision for supplementary briefs on the grant of a building consent by the council.

[9]    In May 2019 Holmes Fire & Safety Ltd, the eighth defendant, provided discovery. That was late. It had been only recently restored to the case. The plaintiffs found out from discovery that during construction Holmes had prepared an alternative design solution for the structure but the construction did not follow the design.

[10]   The plaintiffs filed an amended statement of claim in August 2019 seeking damages for economic loss of about $108,000,000 plus general damages. This is the current statement of claim.

[11]   During 2019 the plaintiffs had trouble meeting the dates to serve their evidence. Adjustments were made. They also sought leave to serve supplementary briefs but ran into resistance. In a minute of 11 October 2019, Lang J vacated the fixture for February 2020 and directed a standby trial for 20 weeks to begin in July 2020. There were other lengthy fixtures for that time and it was uncertain whether this one could go ahead, but the parties treated the fixture as firm. Lang J also gave fresh timetabling directions for service of briefs. The plaintiffs’ updated quantum evidence was to be filed by 30 March 2020.   The last of the defendants’ briefs were to be served  by    30 April 2020.

[12]   On 11 December 2019 Lang J dismissed an application by the plaintiffs to file supplementary briefs, accepting the council’s submission that it would be prejudiced in preparing for trial.3

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

[13]   The plaintiffs say that between the close of pleadings date of 30 November 2018 and the beginning of April 2020, they served briefs of evidence of experts as follows:

1.Defect liability evidence – 30 November 2018.

2.Remedial scope evidence – 5 March 2019

3.Evidence as to the liability of a fire engineer – 19 July 2019

4.Quantum evidence – 23 August 2019

5.Building consent evidence – 23 August 2019

6.BRANZ testing and updating scope for remedial works – 20 November 2019.

7.Quantum evidence – 2 April 2020.

[14]   The evidence served on 2 April 2020 was, however, extensive. There were 110 briefs. 100 were from second plaintiff owners and concerned sales of units and associate assignments, and their GST status. They were not controversial. The council was more concerned with the ten briefs on quantum. These showed a massive increase in the losses claimed as a result of changes in design and scope of repairs. In its eyes those briefs went far beyond what Lang J had in mind when he extended time for updating quantum evidence. Woolford J held a conference on 28 April 2020, immediately after the country had come out of level 4 lockdown. He vacated the trial for July 2020, accepting that it would not be just for the trial to proceed on false and outdated information as to the cost of remediation and that the defendants could not be expected to respond in time for the hearing. He did not set a new fixture, leaving that and timetabling directions for later. The council appealed.

[15]   By this stage the plaintiffs had served more than one brief for each of its experts, in some cases up to five. They were keen to put the evidence for each expert into a single brief so as to make the evidence more presentable. The council on the other hand accepted the benefits of consolidation but objected to the consolidated

briefs containing information that had not been set out in earlier briefs. That difference is resolved in this decision.

[16]   In June 2020 an exchange of correspondence between the parties’ lawyers provided a way forward. On 16 June 2020 the council’s lawyers proposed that by the end of July 2020 the plaintiffs would provide their finalised expert evidence in draft 2020. The briefs would show all changes; they would consolidate all the previous briefs of the experts and there would be notes to show where the content had been taken from earlier. Any new evidence would be clearly identified as such, with an explanation as to why that was not available before. The council would have the opportunity to object to any new evidence. If the council objected to any new evidence, a leave application would be required. After a hearing of the leave application, a fresh clean version of each brief would be served. The council also proposed that it would provide a single brief from each of its witnesses, which would incorporate the evidence served to date and there would be similar tracked changes. The plaintiffs’ lawyers’ letter of 19 June 2020 can be taken as acceptance of that proposal. In the hearing counsel agreed that under this arrangement each side had reserved their rights to include or object to new evidence in experts’ briefs. The council withdrew its appeal.

[17]   On 24 August 2020 the plaintiffs served 35 consolidated briefs of experts. They filed the present application on 29 September. On 16 October Lang J gave directions for the application and set a new date for the trial to begin on 2 May 2020. On 30 October the plaintiffs re-served the experts’ briefs with further footnotes added. The council objects to 17 of the briefs.

The application to amend the statement of claim

[18]   I deal with this application first as the way it is decided is a guide to the application to replace experts’ briefs.

[19]   The plaintiffs’ revised statement of claim amends the quantum claimed by adding tens of millions of dollars to the damages. The council does not object to those amendments and indeed seems to accept there may be yet further amendments to the

amount of damages closer to trial as evidence about remedial costs is brought up to date.

[20]   Instead it objects to the addition of “B1” to the third column on the second row of schedule 2 of the statement of claim. This is the schedule of defects. The third column identifies those parts of the building code which are in issue for particular defects. The defect here is that the fire separation walls are not constructed to maintain the integrity of the walls in a fire. The current pleading says that for this defect the building does not meet the code for:

B2 – Durability

C2 – Prevention of fire occurring

C3 – Fire affecting areas beyond the fire source C4 – Movement to place of safety

B1 refers to structure, that is, safeguarding people and other property from structural failure. The council has been aware for some years now that B1 has been in issue for seven other defects. I take it that it has a structural engineer in its team of experts.

[21]   The plaintiffs explain that they found out structural integrity was in issue for defect 2, after their experts carried out testing at the BRANZ laboratory in late 2019. Since August 2020 the defendants have had the plaintiffs’ experts’ briefs which describe the testing, investigations and the experts’ conclusions. The council says that it has so far done nothing to respond to that evidence. It does not intend to do so until it knows whether it is in issue.

[22]   When a party amends a pleading, they file and serve a new document which replaces the old. The former pleading is now redundant and will not be used at trial to decide what is in issue. Even though the focus will be on the changes made in the new document, the new pleading is more than an add-on to the old. One supersedes the other.

[23]   Without leave of the court a party may amend its pleadings at any time up to the close of pleadings date or any other date set by the court.4 So long as they meet the requirements for a pleading, the amendments may be minor or far-reaching, including withdrawing and adding causes of action. Any inconvenience to the other parties does not matter (except perhaps for costs). But after the close of pleadings date, leave is required under r 7.7 of the High Court Rules 2016:

7.7      Steps after close of pleadings date restricted

(1) No statement of defence or amended pleading or affidavit may be   filed, and no interlocutory application may be made or step taken, after the close of pleadings date without the leave of a Judge.

[24]   The close of pleadings date has a clear purpose, to ensure that the pleadings and all interlocutory matters have been completed so that the parties can concentrate on preparing for the hearing: drafting evidence and serving it, preparing chronologies and the common bundle, and drafting openings. That is demanding work which requires clear time and attention.5

[25]   The leave requirement allows new pleadings in appropriate cases. In Oraka Technologies Ltd v Geostel Vision Ltd, the principles were summarised:6

(a)    The paramount consideration is that the parties should have every opportunity to ensure that the real controversy goes to trial so as to secure the just determination of the proceeding.⁷

(b)    Due regard must also be had to whether the proposed amendment will cause significant delay or prejudice another party.⁸

4      High Court Rules 2016, r 7.77.

5      RHH Ltd v Anderson (No 3) [2018] NZHC 2045 at [9]. See for example the disruptive interlocutory applications by the defendant in the Botany Downs Secondary College litigation, Minister of Education v H Construction North Island Ltd [2017] NZHC 3147, [2017] NZHC 3228 and [2018] NZHC 20.

6      Oraka Technologies Ltd v Geostel Vision Ltd [2015] NZHC 991 at [17]. See also Monster Energy Company Ltd v Ox Group Global Pty Ltd [2016] NZHC 2124; Lyttelton Port Company Ltd v Aon New Zealand [2019] NZHC 726 at [29].

7      See Thornton Hall Manufacturing Ltd v Shanton Apparel Ltd [1989] 3 NZLR 304 (CA) at 309; Chilcott v Goss [1995] 1 NZLR 263 (CA) at 272–273; Marr v Arabco Traders Ltd (No 8) HC Auckland A1195/77, 12 March 1987 affirmed  on appeal in Elders Pastoral Ltd v Marr (1987)  2 PRNZ 383 (CA).

8      Elders Pastoral Ltd v Marr (1987) 2 PRNZ 383 (CA).

(c)    Even when serious prejudice and significant delay will arise, an amended pleading may nevertheless be permitted if the proposed claim has substantial merit and will not cause injustice to the defendants.⁹

(d)    The court should consider the merit, or absence thereof, in a proposed amended pleading.¹⁰

[26]   In Whakatane District Council v Bay of Plenty Regional Council Duffy J noted that the court is required to conduct a balancing exercise between the general concern that parties to litigation comply properly with procedural requirements and the particular interest in each case of ensuring that the case is justly determined.11

[27]   Although in a different context, a comment of Fogarty J in his decision of     3 July 2017 is apposite:12

… Procedural Rules comprise a set of rules, standards and principles, to be applied to secure the just, speedy and inexpensive determination of any proceedings, of which the most important imperative is a just determination. No Judge is going to apply any one “rule” without appreciating the consequence of the application to that “rule” of the ultimate duty of the Judge and the Court, which is to secure a just determination of a dispute.

[28]   With leave, pleadings may be amended very late, even during the trial.13 The need to amend may come from a late realisation of a mismatch between the pleadings and the evidence, that sometimes comes when evidence is prepared and witnesses are briefed, or worse, when they are cross-examined. While the need to repair the pleading might have been seen earlier, the court generally does not bar leave for that reason. The Court of Appeal made this clear in Elders Pastoral Ltd v Marr:14

Mr Temm and Mr Ingram argued for what may be called a disciplinary approach to belated applications for amendments: to penalise dilatoriness and to discourage opportunism. In our opinion, if the applicant can surmount the three formidable hurdles of showing that the amendment is in the interests of justice and will not significantly prejudice defendants or cause significant delay, very little if any weight should be given to the suggested desirability of something akin to the denunciation which is an established factor in criminal sentencing.

9      Body Corporate 177519 v Auckland City Council HC Auckland CIV-2005-404-5563, 24 May 2011.

10     Fordham v Xcentrix Communications Ltd (1996) 9 PRNZ 682 (HC) at 683.

11     Whakatane District Council v Bay of Plenty Regional Council (2008) 19 PRNZ 91 at [10].

12     Body Corporate 366567 v Auckland Council [2017] NZHC 1520, (2017) 23 PRNZ 569 at [46].

13     High Court Rules 2016, r 1.9; and as an example, Elders Pastoral Ltd v Marr (1987) 2 PRNZ 383 (CA).

14     Elders Pastoral Ltd v Marr (1987) 2 PRNZ 383 (CA) at 385.

[29]   The plaintiffs’ proposed amendment introduces a  new  issue:  whether  defect 2 involves non-compliance with the B1 standard in the building code. Allowing the amendment will ensure the real matters in controversy will go to trial and is therefore in the interests of justice. The plaintiffs sought their amendment in their application of September 2020, twenty months before the hearing. They have disclosed the evidence they will call to prove the claim. The defendants have adequate time in which to respond. They are not prejudiced by having to answer the new allegation. It will not be necessary to change the fixture date on account of the amendment. The council does not suggest that the amended pleading is unsound under the rules for pleadings. It reserves its rights to contest the merits, including any limitation questions. Under normal principles there is no reason to refuse leave for the amendment.

[30]   The council says however that there is no evidence to support the new allegation. That is based on its opposition to the other application. It says that because the court should not allow the plaintiffs to replace their experts’ briefs with new evidence, including evidence that the B1 standard is relevant to defect 2, the plaintiffs should not be given the opportunity to amend and put the matter in issue.

[31]   That puts matters back to front. Pleadings come before evidence. With pleadings, a plaintiff states the case that it hopes to prove. Evidence comes later, to see if it can prove its allegations. The soundness of pleadings does not turn on the adequacy of the evidence to prove them. A pleadings decision goes to whether the party should be given the opportunity to prove the matters that they wish to put in issue. The council’s objection is unsound. The amendment is accordingly allowed.

[32]   I add that I do not necessarily accept the council’s argument that the new evidence to which it objects is the only way the plaintiffs can prove the new allegation. When I asked whether a plaintiff might also prove its case through cross-examination of defence witnesses, counsel referred to s 98(1) of the Evidence Act 2006:

98       Further evidence after closure of case

(1)In any proceeding, a party may not offer further evidence after closing that party’s case, except with the permission of the Judge.

That provision bars a party, who has closed its case, from calling fresh witnesses or re-calling those who have already given evidence without the judge’s permission. But it does not limit cross-examination of defence witnesses. One purpose of cross- examination is to get answers that will support your case. Section 98 does not help the council’s objection.

The application to replace experts’ briefs

[33]   Each brief of the 17 experts’ briefs in issue is intended to replace earlier briefs by those witnesses. The briefs show where parts of former evidence have been deleted and new sections have been inserted.

[34]   One of the more significant ones is the brief of a structural engineer, Dr Hyland. It is 165 pages long, with 487 paragraphs. While there are a number of tweaks, there are also significant insertions dealing with: (for defect 1) his analysis in 2019 of the floor system using a program, Abaqus, to test the effects of fire on structures, his 2019 structural fire modelling of staircases and lift wells, his 2020 structural fire modelling; (for defect 2) testing at BRANZ at Wellington between September and November 2019, further modelling in July/August 2020; fresh assessments of what prudent fire and structural engineers would have undertaken in 2006; technical literature available at the times of design and construction; updates to remedial structural design he made from December 2019 to March 2020. His evidence also refers to extensive documents, including reports, results of modelling and calculations (also to be used as evidence) to support his findings. Some of his new evidence about defect 2 is relevant to the “B1” allegation I have dealt with above. The rest of his new evidence is about matters already in issue. Part of his brief refers to his having sent some of his reports to the council’s lawyers in 2019. For good measure, counsel also proposed that his latest brief be modified by inserting a lengthy footnote about an analysis made in late 2020.

[35]   Some of the other experts’ briefs have relatively minor changes; others are more extensive, but not as much as Dr Hyland’s. Taken together they present a large amount of new information for the defendants to deal with.

The approach to replacement briefs

[36]   The first question is how the court should deal with a proposal for one side to serve fresh briefs of its experts in place of their existing briefs when the time for serving briefs has passed. There is no rule in the High Court Rules 2016 that deals exactly with this. The council proposed that it be dealt with as a matter of supplementary briefs under r 9.8:

9.8      Supplementary briefs

(1)A party wishing to offer a supplementary brief must serve it as soon as possible.

(2)The acceptance and use of the supplementary brief in court will be at the discretion of the trial Judge.

These are not, however, supplementary briefs. These briefs are intended to stand on their own and to take the place of earlier briefs. A supplementary brief, on the other hand, is in addition to, but does not replace earlier briefs. Moreover, r 9.8 comes into play closer to trial. The trial judge decides whether supplementary briefs can be used. Here, the matter has been raised well before trial and no trial judge has been appointed. A decision is required now whether the new briefs can replace by old ones.

[37]    As the question concerns evidence, the objective of Part 9 of the High Court Rules is relevant. Rule 9.1 says:

9.1       Objective and scope

(1)When applying the rules in this subpart to a proceeding, the court and the parties must pursue the just, speedy, and inexpensive determination of that proceeding.

(2)The parties must also ensure that the briefs and the common bundle are commensurate with the goal of keeping the cost of the proceeding proportionate to the subject matter of the proceeding.

(3)The documents to be produced at the trial or hearing and the evidence- in-chief of witnesses must be prepared, produced, and led in accordance with this subpart.

That applies the general objective under r 1.2 (“to secure the just, speedy, and inexpensive determination of any proceeding”) to matters of evidence.

[38] Under r 9.7(2):

9.7       Requirements in relation to briefs

…

(2)The date by which the parties must complete and serve briefs upon   each other, simultaneously or sequentially, must be determined by the court at a case management or issues conference, having regard to the needs of the case.

[39]   That sets a deadline after which a party cannot serve a brief, at least not without the consent of the other side or an order extending time under r 1.19. Before the date set under r 9.7(2) a party may amend its briefs, withdraw them and replace them. The other side can have no objection to briefs being changed (except perhaps to claim wasted costs).

[40]   Here, the date fixed by the court for the plaintiffs to serve their briefs of evidence has already passed. The plaintiffs are asking for the court to fix a fresh date for replacement briefs to be served. It is not unusual for timetable directions to be adjusted as a case progresses. There is power to extend time under r 1.19. Similarly, replacement briefs may be allowed by analogy under r 1.6. The analogy here is with amended pleadings. In both cases, pleadings and briefs, one document is to be read in place of another, which will become redundant. Replacement does not require leave if carried out before a date set by the court but is required after that date. Differences are that pleadings state the matters that the party will prove, but do not set out evidence. Briefs on the other hand state the evidence that witnesses will give. The times for serving briefs is generally after the close of pleadings date. But those differences do not require a different approach.

[41]   Accordingly the approach used in applications to amend pleadings after the close of pleadings date can also be used to decide whether to allow a party to replace briefs after the date for serving them. This is a balancing test where the court is concerned to see that the parties have every opportunity to ensure that the real controversy goes to trial, but that is weighed against the risk of serious prejudice to the other parties and avoiding delay. A disciplinary or denunciatory approach is not called for.

Applying that approach to this case

[42]   The plaintiffs have continued inspecting and investigating, modelling, testing and analysing, refining the scope of their remedial work and updating their remedial costs, and have put all that information in fresh briefs after the date for serving their evidence. No doubt that new information may be valuable to the plaintiffs in designing and carrying out their remedial work, but the issue is whether it may be used in evidence.

[43]   The object of any plaintiff is to present as sound a case as they reasonably can, bearing in mind the amounts in issue and the resources available. They will want to reduce as much as possible areas of weakness in their case. The law’s general approach is to let each side give as much evidence as it wants to make out its case. In his minute of 11 May 2018, Lang J said:15

I have concluded it is not for the Court or the defendant to dictate the manner in which the plaintiffs’ experts go about their business. It must be for the experts to guide the plaintiffs as to the most appropriate way in which to advance their claim before the Court.

The overriding principle is that of the need to obtain justice between the parties. The plaintiffs are entitled to present their case in the way that they consider maximises the chance of obtaining an accurate award of damages.

[44]   Like this one, many building defects cases turn on the evidence of experts. Both sides will be keen to see that their experts’ evidence is soundly based on facts and specialist knowledge within their field of expertise. And they will appreciate that the other side will also have experts who will scrutinise evidence for weaknesses and gaps. In this case large sums are in issue. It is much more than a run-of-the-mill leaky building case but involves less familiar structural and fire safety issues. The experts will be more than the usual ones in leaky building cases. The judge is likely to be less familiar with matters of structural integrity and fire safety expertise than the weathertightness issues in a leaky building case.

[45]   Accordingly it is understandable that the plaintiffs’ experts have continued their inspections, investigations, modelling and testing to check the results against the

15     At [10]–[11].

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. Ensuing misunderstanding and confusion may play out to the advantage of the defence. Given that forensic risk, why should the plaintiffs be deprived of the opportunity to serve a new brief showing that they have addressed an area of potential weakness? Besides, a fresh brief showing that what might have been an area of weakness is well buttressed may reduce the scope of cross-examination, while still ensuring a just result.

[46]   Minister of Education v Carter Holt Harvey is an example of late testing evidence being admitted.16 That was a product liability case where the damages claimed were much higher than this case. Countless school buildings were in issue. The brief was served after the time for serving evidence, but Fitzgerald J considered that the defendants had enough time to respond to it.

[47]   In Signal v Berry, a professional negligence case where leave was sought for supplementary evidence, Brown J said:17

When I explored with Ms Eckford any other sort of prejudice, I was left with the impression that the defendants consider that they are disadvantaged by the fact of the plaintiffs being able to improve on their evidential case. However, if the fact of improving a party’s case precluded the grant of leave to serve supplementary briefs, I doubt that leave would ever be given.

16     Minister of Education v Carter Holt Harvey (No 9) [2020] NZHC 1539 at [175]–[186].

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

The council’s objections

[48]   Tactically it would suit the council to confine the plaintiffs to their experts’ briefs served up to April 2020, to leave the new information in the proposed briefs out and to take its chances at trial to see if the plaintiffs can get that information before the judge. But it does not put its case so brazenly. Instead it puts its opposition on a more technical basis.

Only new evidence?

[49]   It requires the plaintiffs to justify giving late updating briefs from their experts. Its notice of opposition includes these grounds, repeated a number of times, objecting to parts of the new evidence:

1.No meaningful or proper explanation for the changes to the evidence.

2.No meaningful or proper explanation for the new evidence.

3.The new assessments and/or analysis could have been carried out at the time of the plaintiff’s original evidence.

4.The new research material now relied upon was available at the time of the plaintiffs’ original evidence.

5.The plaintiffs are bolstering their evidence in response to the Council’s evidence.

6.The new assessments and/or analysis (for example, the FaST modelling) could have been carried out at the time of the plaintiffs’ original evidence.

[50]   The council says that only truly new evidence may be admitted and by that it means evidence on matters such as quantity surveying where costs change over time. All other evidence could have been given earlier and therefore should not be allowed now. But that is to take the punitive approach that did not find favour with the Court of Appeal in Elders Pastoral Ltd v Marr.18 There may be explanations for some of the evidence not coming in earlier. Giving expert briefs in stages is one. That was a result of the council chivvying for an early hearing. As the inquiries progressed and remedial designs were worked out, it was found that earlier briefs had to be modified.

18     Elders Pastoral Ltd v Marr (1987) 2 PRNZ 383 (CA) at 385.

Another aspect is that the plaintiffs obtained discovery of documents of Holmes Safety & Fire Ltd only late, in 2019. That disclosed new problems that arose during construction. Fresh evidence on that was prepared. But not all the changes can be explained in that way. Still, making the plaintiffs justify not giving the new evidence earlier is generally beside the point. As with applications to amend pleadings, the court’s focus is on seeing a just determination of the case where each side is given a proper opportunity to present their evidence. A reasonable opportunity for the defendant to reply to the new evidence will normally ensure that goal is met, even if the plaintiff does not have a good reason for giving the new evidence late.

[51]   The council says that the plaintiffs have not kept to the agreement in June 2020 to explain why they did not give the evidence earlier. But that is beside the point. The court’s power to allow replacement briefs is independent of the parties’ agreement. The court could consider the plaintiffs’ application even if the parties had not made the arrangement.

[52]   Next, the council took a more general objection that this casual approach to the rules should not be allowed. Evidence is not an iterative process. Plaintiffs must put their case in full, first. It is not acceptable to serve evidence, then carry out more investigations to create new information to be given in another round of evidence. There is the danger that Jagose J warned of in SCC (NZ) Ltd v Samsung Electronic New Zealand Ltd, that a plaintiff may keep its powder dry by putting up a barebones case at the outset and giving the substance of its case later after seeing the defendant’s proposed evidence.19 In that case the plaintiff had given very extensive “reply” evidence. The unfairness there was the lack of reasonable opportunity to the defendant to respond, but that does not arise here. The council also submitted that unless there were consequences for not complying with the rules, plaintiffs would assume they could get away with this sort of thing with impunity.

[53]   There is a point in the council’s general objection, but it only goes so far. Rules such as r 9.7(2) are to be followed. A party who does not serve all its evidence in time must seek leave, if other parties oppose. The prospect of an opposed interlocutory

19     SCC (NZ) Ltd v Samsung Electronic New Zealand Ltd [2018] NZHC 2780 at [205].

application to obtain leave would normally encourage parties to work within the rules. An absolute approach is not called for. The balancing Duffy J referred to in Whakatane District Council v Bay of Plenty Regional Council comes into play. Where there has been abuse of the sort that concerned Jagose J, leave may not be given. It will turn on the circumstances of the particular case.

Evidence objections

[54]   As a further ground, the council made evidence objections. Here are some taken from its notice of opposition:

1.The changed or new expert opinions are largely reliant on extensive documentation, some of which are prepared by non-witnesses.

2.The documents do not explain the reasoning or justification for inputs used and/or assumptions made.

3.Supplementary evidence of this nature was not permitted following the judgment of Lang J (dated 11 December 2019) in this proceeding.

4.The evidence is outside the scope of updated quantum evidence.

5.Lang J earlier expressly declined leave for the plaintiffs to give the evidence (the judgment of 11 December 2019).

6.No explanation provided as to why the methodology or calculations used for either of the amounts contained in the schedules nor the assumption or reasons applied in reaching that conclusion (changed by its quantum evidence).

[55]   There are two specific evidence objections that need to be dealt with separately, evidence of Messrs Fairhead and Klosser about water penetration tests, and the evidence of Mr White, the quantity surveyor. The other evidence objections were to particular parts of the experts’ briefs. It was accepted that the evidence was relevant, but the complaints included that the evidence was conclusory (notwithstanding the considerable data to support it), that briefs made inappropriate reference to supporting documents, such as reports of testing, that counsel could not understand the structural engineer’s calculations and should not have to rely on the council’s engineer to follow them. The complaints were about the way the evidence was presented rather than the content.

[56]   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. There is a separate procedure for challenging the admissibility of briefs, r 9.11:

9.11 Compliance with Evidence Act 2006

(1)        Any challenge to the admissibility of a brief, in whole or in part, must be notified to the party or parties concerned within 20 working days after receipt of the brief by the challenging party.

(2)        If the issue is not resolved between counsel in a further 10 working days, notice that there is an admissibility issue must be given to the court by the challenging party.

That offers a more efficient way of dealing with the question. As the council already has the briefs, the 20 working days will run from the date of this decision. Counsel are reminded that in most cases any unresolved admissibility questions are usually left for the trial judge. Decisions before trial not to accept evidence are normally made only in the clearest of cases.

[57]   The third ground in [54] above refers to Lang J’s decision of 11 December 2019.20 At that time the fixture for February 2020 had already been vacated. The plaintiffs had served all their briefs except their updating quantum evidence. He dismissed the plaintiffs’ application under r 9.8 to serve supplementary briefs by Messrs Fairhead and Klosser about water penetration tests. In doing so, he said:21

I consider the time has now well and truly passed for the plaintiffs to serve further briefs of evidence of this type.

With that the council says that the plaintiffs are forever barred from serving any further briefs of evidence without its consent, not just briefs by Messrs Fairhead and Klosser.

[58]   Lang J made the comment as part of his reasons for not allowing the supplementary briefs. The council is taking it out of context in applying it to all other briefs served by the plaintiffs after that decision. Generally, comments made in an interlocutory decision do not extend beyond that decision. Besides it has been overtaken by events.  The plaintiffs served briefs at the beginning of April 2020 to

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

21 At [17].

which the council took exception. That led to the conference on 28 April 2020 before Woolford J, who was generally receptive to the plaintiffs giving their proposed evidence as to the increase in quantum, including about changes in scope of repairs. The council appealed his decision and the parties agreed in June 2020 that new consolidated briefs could be served, with both sides reserving their rights as to any new content. With that, the matter was left open for fresh determination. Lang J’s comment was now by-the-by.

[59]   The council also made a cheap submission that expert evidence is only opinion and, unlike objective facts, opinions are subjective and changeable. Tot homines tot sententiae.22 That does a disservice to expert witnesses who must base their evidence on facts and specialist knowledge of their field. It must be capable of independent assessment by others in their field and is accordingly objective.

Water penetration test evidence

[60]   Mr Klosser is an architect in a building consultancy practice. Mr Fairhead is a façade consultant. Their briefs refer to water penetration tests. That evidence is relevant to the question whether old joinery can be reused in the remedial work or should be replaced. The council says that they cannot give that evidence because Lang J ruled against it in his decision of 11 December 2019. Unlike his general comment in [57] above, his decision applies directly. He said:23

[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.

…

[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

22     There are as many opinions as there are people.

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

carried out so I see no basis on which it could object to that being done.

[61]   In the hearing I suggested that r 7.52 of the High Court Rules applied. Under that rule a party who fails on an interlocutory application must not apply again for the same or a similar order without first obtaining leave, which may be granted only in special circumstances. As they did not succeed in the application to give supplementary briefs by Messrs Klosser and Fairhead about their water penetration tests, the plaintiffs needed leave to apply afresh to give the same evidence. On further consideration, r 7.50 is relevant:

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.

[62]   While the plaintiffs made a formal application under r 9.8 to serve the supplementary briefs, Lang J heard the application in chambers. A decision before trial whether to allow supplementary evidence is a matter of case management, even if it is made after the close of pleadings. Directions for service of briefs are standard in case management. The change of circumstances is that the case no longer has a fixture in July 2020, as it had in December 2019, and the council is no longer prejudiced with insufficient time to prepare a response, as it was in 2019. Accordingly, Lang J’s earlier decision is not a bar to Messrs Fairhead and Klosser including evidence about water penetration tests in their briefs.

Evidence as to remedial costs

[63]   The council addressed this separately from its other objections. It says that parts of the brief of the plaintiffs’ quantity surveyor, Mr White, do not comply with the code of conduct of expert witnesses as it does not state the facts and assumptions on which his opinion is based and does not state the reasons for his opinions. There

are four briefs of Mr White: August 2019, November 2019, April 2020 and August 2020. In his minute of 11 October 2019 Lang J recorded the council’s objection to the first brief as unsupported by detail as to the reasons underpinning the opinions.24 The next brief had a chronology of events recording steps by Mr White and others to ascertain the scope of works and their costs. It also describes their methodology. The next two briefs do not repeat that evidence but describe other steps and may not be read as describing a methodology. I understand the council’s point in raising this matter is to make sure that Mr White complies with the code. It accepts that he did so in his second brief and says that he should be able to in his later briefs.

[64]   At this stage of the case I cannot assess whether his latest brief is substantially helpful under s 25 of the Evidence Act and whether the alleged non-compliance with the code should exclude his evidence under s 26. All the same the plaintiffs are on notice as to the challenge to Mr White’s evidence. They have the opportunity to address it and are aware of the risks if they do not.

[65]    The council’s evidence objections do not give reasons to reject the replacement briefs. There is however another evidence aspect, one supporting the plaintiffs. As required, the experts’ briefs all say that they agree to comply with the code of conduct for expert witnesses.25 The code includes these requirements:

3In any evidence given by an expert witness, the expert witness must—

…

(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.

4If an expert witness believes that his or her evidence or any part of it may be incomplete or inaccurate without some qualification, that qualification must be stated in his or her evidence.

5If an expert witness believes that his or her opinion is not a concluded opinion because of insufficient research or data or for any other reason, this must be stated in his or her evidence.

24 Minute of 11 October 2019 at [9].

25     High Court Rules 2016, r 9.46 and sch 4.

Under the council’s case, the experts would have to give their evidence according to their investigations and the conclusions they had drawn as at the dates of their original briefs. They would not be able to include in their evidence any references to later tests and investigations they had carried out or to tell the court that, in view of more information that has come to hand, their earlier evidence is incomplete or needs to be modified. That would not comply with the code. The point here is that experts must give their opinions as at the time they give evidence, not opinions they held earlier, and their opinions must be given in the light of all the relevant information they hold, not just some they had in the past. That counts against rejecting the new briefs.

Prejudice to defendants?

[66]   The council did not consider that it should have to rely on prejudice to resist the new briefs being served. It did not raise it in its notice of opposition and it did not give any evidence as to prejudice it would suffer from the new briefs being served. The plaintiffs on the other hand accepted that to get the briefs in they would have to show absence of prejudice to the defendants. They proposed that the defendants should have until the end of August 2021 to serve their briefs in response.

[67]   In response the council submitted that it could not be certain that it could complete its evidence within that time. It said that the plaintiffs had taken longer to prepare their evidence, so it should have similar time. Just as the plaintiffs’ experts had done modelling, so would the defendants’. It could take just as long.

[68]   I appreciate that the defendants’ experts may not have actively engaged with the new information, but they must have looked at it. The council’s affidavits in opposition show that two of its experts have read briefs in their areas. As the council has had the plaintiffs’ briefs since August 2020, it can hardly say that it has been taken by surprise. There are no directions requiring the defendants to take other steps at present. The council has clear time in which to prepare responses, including carrying out further inspections, investigations and modelling. Six months should be long enough. That is longer than is usually allowed for the exchange of evidence in building defects cases but allows for the greater complexity of this case. It does not need to be as long as the plaintiffs took, as preparation of a case by a plaintiff is more

investigatory, more trial and error to establish what can be included in the case, whereas a defendant is presented with that case and is required only to challenge, not to set up another case. The time until trial in May next year leaves space for extensions if properly required. The council has applied to review my decision. I do not consider that that stands in the way of the council getting on with preparing its responses to the briefs now.

[69]   There is one possible head of prejudice to the council – wasted costs. It has already spent time and resources on preparing its defence briefs. It must now go over the plaintiffs’ experts’ briefs afresh and prepare new answers. That will require more work and expense than if it had received all the plaintiffs’ evidence at the outset. The remedy for that will be in costs. I do not order any costs now. I do not have any information on which I could make an order for wasted costs. That is better resolved by the trial judge, but the plaintiffs are on notice that replacing their experts’ briefs has costs consequences.

Delay

[70]   Allowing the plaintiffs to replace their experts’ briefs will not create delay. The trial date has already been fixed and there are no suggestions that it should be changed on account of the experts’ new briefs. Time to deal with them has already been built in.

Outcome

[71]   The balancing test favours allowing the plaintiffs to replace their experts’ briefs. The defendants have enough time to respond. Allowing the new briefs and evidence in response from the defendants will secure a just determination of the case without disrupting the trial date. Any prejudice to the defendants can be addressed by costs after the trial.

[72]   In the hearing the plaintiffs presented a proposed timetable of steps through to trial. The council did not submit on it. I have largely adopted the plaintiffs’ proposals but have extended the time for the defendants to serve their briefs. 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.

[73]   The timetable allows for the experts to confer in November and December 2021. That should not stand in the way of experts conferring earlier if they wish. Defence experts may seek clarification of aspects of the plaintiffs’ experts’ briefs. There should be little difficulty with contacting the plaintiffs’ experts earlier.

[74]   The council has sought a second opinion. As this proceeding was started in 2014, the rules before the Senior Courts Act 2016 rules still apply: review by a justice of this court.26 While the council filed its application before this judgment, it may have better chances on review if it addresses my reasons. The usual five working days under former r 2.3(2)(a) is too short. Any amended review application is to be filed and served within ten working days of this judgment. The Registrar is to have this case listed before the duty judge promptly with a view to the review application being heard as soon as possible. Notwithstanding the review application, the council is expected to get on with its responses to the plaintiffs’ new briefs.

[75]   While I have held that any claim for wasted costs is for the trial judge to decide, costs on this application need to be decided. The parties have two weeks to see if they can agree costs. If not, the council is  to  file  a  memorandum  on  costs  within three weeks. I have assumed that the council will seek costs first because it will say that the plaintiffs have sought an indulgence. The plaintiffs are to file their response within a further week. Some judges restrict the length of costs submissions. For this case I do not, but counsel should bear in mind the merits of succinctness.

[76]My orders are:

1.The plaintiffs are granted leave to file their interlocutory application after the close of pleadings date.

26     Senior Courts Act 2016, sch 5, pt 2, cl 11(3)(b) and Judicature Act 1908, s 26P.

2.If they have not already done so, the plaintiffs are directed forthwith to serve signed copies of the proposed consolidated experts’ 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 Clark Hyland shall include the footnote and exhibit set out at paragraph 341 of the plaintiffs’ submissions dated 22 January 2020.

3.Leave is granted to file and serve the amended statement of claim in terms  of  the  draft  attached  to  the  affidavit  of  Janice  Wong   of 29 September 2020.

4.I give these timetable directions:

(a)By 30 September 2021, the defendants are to serve their evidence, all exhibits referred to in their evidence and a table of contents (in searchable Word and hyperlinked PDF formats).

(b)By 30 October 2021, the plaintiffs are to serve their evidence in response only to the defendants’ affirmative defences of betterment and failure to mitigate.

(c)During November and December 2021, there are to be expert witness conferences.

(d)By 31 January 2022, the reports of experts are to be filed and served. The reports shall set out the matters on which the experts agree and disagree, and the reasons for their disagreement.

(e)By 14 February 2022, the plaintiffs are to serve the exhibits and a draft table of contents to the casebook (in searchable Word and hyperlinked PDF formats). The sequences of the documents of the draft table of contents (especially the Exhibits section) shall be the plaintiffs’ proposed sequence under High Court Rule 9.4(5)(a).

(f)By 7 March 2022, the plaintiffs are to serve their chronology of facts. All defendants are to confirm acceptance of the draft table of contents (including sequence of documents) and/or provide a list of further documents to be included in the table.

(g)By 15 March 2022, the plaintiffs are to file and serve the casebook in electronic form.

(h)By 28 March 2022, all defendants shall serve their chronologies.

(i)By 5 April 2022, all parties shall serve their hyperlinked briefs of evidence. These documents will be served in accordance with the exchange protocol in these directions.

(j)By 11 April 2022, the parties will bring significant disputed

facts to the court’s attention by way of memorandum.

(k)During April 2022, there will be a pre-trial conference.

(l)By 19 April 2022, the plaintiffs will file and serve a copy of their opening submissions.

(m)Any  additional  documents  added  to  the  casebook  after   15 March 2022 shall be added only in accordance with the following directions:

1.          As each party files and serves documents in accordance with the Rules, that party will:

(a)    add those documents to the casebook in the Supplementary folder (hyperlinked where necessary);

(b)    add the new documents to the table of contents (in searchable Word and hyperlinked PDF format) in the Supplementary section; and

(c)    provide a copy of the new documents and an updated table of documents on a USB drive or other similar means of provision, to the other parties and to the court.

2.          A party receiving documents (and an updated table of contents) is expected to add the documents it has received to its own copy of the casebook.

[77]The case keeps its fixture for 20 weeks beginning on 2 May 2022

[78]Leave is reserved to apply for further directions.

………………………………… Associate Judge Bell