Body Corporate 378351 v Auckland Council
[2020] NZHC 2987
•11 November 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-2053
[2020] NZHC 2987
IN THE MATTER OF Washington Apartments BETWEEN
BODY CORPORATE 378351
First Plaintiff
CATHERINE RACHEL KEMP & ORS
Second PlaintiffsAND
AUCKLAND COUNCIL
First Defendant
DOWNER NEW ZEALAND LIMITED
Second Defendant…Cont over
Hearing: On the papers Appearances:
TJ Rainey & GR Grant for the Plaintiffs
SB Mitchell and K Perry for the First Defendant
LL Fraser and Z Wall-Manning for Ninth Third PartyJudgment:
11 November 2020
RESERVED JUDGMENT (No.2) OF ASSOCIATE JUDGE SMITH - COSTS
This judgment was delivered by me on 11 November 2020 at 5pm
……………………………………….
Registrar/Deputy Registrar
Solicitors/Counsel:
Rainey Law, Auckland Heaney & Partners, Auckland Bell Gully, Auckland
Chapman Tripp, Auckland Kensington Swan, Auckland
Chancery Chambers, Auckland
Body Corporate 378351 v Auckland Council & Ors [2020] NZHC 2987 [11 November 2020]
STEPHEN MITCHELL ENGINEERS LIMITED
First Third Party
STEPHEN ROBERT MITCHELL
Second Third Party
MAXINE BRANNIGAN
Third Third Party
WOODHAMS MEIKLE ZHAN ARCHITECTS LIMITED
Fourth Third Party
MICHAEL JOHN STEPHEN
WOODHAMS – Discontinued Fifth Third Party
JEFFREY LAWRENCE BIRD
Sixth Third Party
FAÇADE DESIGN SERVICES LIMITED
Seventh Third Party
RONALD CHARLES HANLEY
Eighth Third Party
BECA CARTER HOLDINGS & FERNER LIMITED
Ninth Third Party
BRIAN CHIN
Tenth Third Party
RACHEL CARTER
Eleventh Third Party
STAHLTON PRESTRESSED
CONCRETE an operating division of Fulton Hogan Limited
Twelfth Third Party
… Cont over
BRADNAM’S WINDOWS & DOORS
an operating division of Altus NZ Limited
Thirteenth Third Party
WARWICK BELL – Discontinued Fourteenth Third Party
GAVIN SMITH
Fifteenth Third Party
[1] In a reserved judgment dated 15 July 2020 (the judgment),1 I struck out certain parts of the plaintiffs’ claims against the first defendant (the Council). I also struck out the Council’s third party claims against the ninth third party (Beca) and the twelfth third party (Stahlton). I indicated in the judgment that if the parties were unable to agree on costs, memoranda could be filed.
[2] Since the judgment was issued, the Council has agreed with Beca and Stahlton the amounts to be paid to them for costs. The Council has agreed to pay Beca’s reasonable scale costs and disbursements totalling $14,750.94, and Stahlton’s reasonable scale costs and disbursements totalling $17,798.46. In agreeing those costs figures with Beca and Stahlton, the Council reserved its position to claim reimbursement from the plaintiffs for the amounts paid to Beca and Stahlton.
[3] The Council has not been able to resolve its claim for costs against the plaintiffs. Specifically, the Council and the plaintiffs have been unable to agree on:
(i)The costs the Council claims from the plaintiffs as a result of the fire and structural defects having been struck out; and
1 Body Corporate 378351 v Auckland Council [2020] NZHC 1701.
(ii)Whether the costs of Beca and Stahlton should be paid by the Council or by the plaintiffs.
[4] Memoranda have been received from counsel for the Council and the plaintiffs, and a short memorandum has been filed by counsel for Beca, confirming that its costs claim is for the sum of $14,750.94.
[5] The plaintiffs accept that they are liable for the Council’s costs on a 2B basis relating directly to its successful strike out application, plus the $500 filing fee. However the Council has claimed further costs of $60,862 for additional steps taken in the proceeding, and for a proportion of witnesses’ expenses, relating specifically to the defects struck out of the plaintiffs’ claim. The plaintiffs reject the claim for those further costs. They also reject the claim that they should be solely responsible for meeting the costs of Beca and Stahlton.
The Council’s claim for costs
The Council’s own costs
[6] The Council claims total costs of $70,106, as set out in the table in Schedule A to this judgment.
[7] The Council’s basis for claiming for all costs incurred to date in respect of the particular defects that have been struck out, is that the fire and structural defects should not have been pleaded in the first place. Those particular claims were out of time. Ms Mitchell and Mr Perry submit that the Court found in the judgment that there was no inter-connection between the fire and structural defects on the one hand and the weathertightness defects on the other. They then refer to my statement in the judgment that:2
… I do not think the fact that the structural defects and fire defects might have to be remediated before the weathertightness defects can be repaired avails the plaintiffs.
2 Body Corporate 378351 v Auckland Council, above n 1, at [100].
[8] Ms Mitchell and Mr Perry submit that, as a result of the finding in the judgment that the structural and fire defects are not connected to the weathertightness defects, the Council ought to be entitled to proportional scale costs for all steps taken in this proceeding that were appropriately taken in responding to the fire and structural defects, including expert fees. They further submit that it is appropriate for all such costs to be addressed at this stage. Costs relating to the remainder of the claim can be dealt with at the end of the proceeding.
[9] Ms Mitchell and Mr Perry acknowledge that a number of the steps taken by the Council’s lawyers and expert witnesses to date have been directed to defending the claim as a whole. To account for that, the Council has applied a percentage deduction, recognising that it can only reasonably claim a portion of these costs, representing attendances related to the fire and structural defects.
[10] On this “apportioning” of the costs claim, Ms Mitchell and Mr Perry make the following submissions:
(1)The Council is entitled to 100 per cent of the scale costs relating to the filing of, preparation for, and attendance at the hearing of the strike-out application.
(2)No costs have been claimed by the Council in respect of its opposition to the strike-out claims made by Beca and Stahlton.
(3)The result of the Council’s strike-out application was that 14 defects were struck out from a total of 33 pleaded defects (42 per cent). On that basis, a claim of 42 per cent of the Council’s scale costs and disbursements incurred in dealing with the plaintiffs’ claim as a whole should be awarded.
(4)As only two of the 15 third party claims issued by the Council (13 per cent) have been struck out, the Council is only claiming 13 per cent of scale costs for its attendances relating to the third party proceedings issued by it.
(5)The Council engaged four expert witnesses to address the defects originally pleaded by the plaintiffs. The Council has conferred with its experts, to assess the proportion of each expert’s work that can properly be related to the structural and fire issues. Percentages have been applied accordingly, and expert witnesses’ expenses should be awarded in the proportionate amounts claimed (total $52,277).
[11]Council provided the following summary of the claims for expert witness fees.
[12] Mr David Bradshaw, a structural engineer, was engaged to provide advice in relation to the structural defects that have now been struck out. Mr Bradshaw’s fees ($21,838.50) have been claimed in their entirety.
[13] A fire engineer, Mr Michael Simpson, was engaged to provide advice in relation to the fire defects that have now been struck out. Mr Simpson’s fees ($1,897.50) have also been claimed in their entirety.
[14] An architect, Mr Colin Orchiston, was engaged to provide advice in relation to the design defects that were originally pleaded in the claim. In total, there were 11 defects which were categorised as design defects. Of those 11 design defects, four have now been struck out (36 per cent of the design defects pleaded). Given that 36 per cent of the alleged design defects are no longer in issue, 36 per cent of Mr Orchiston’s fees (total $4,593.52) have been claimed.
[15] The fourth expert is Mr Grant Hunt. He was engaged as a building consultant and quantity surveyor, and he and his team advised on all defects originally pleaded in the claim. Since the strike-out judgment, Mr Hunt has provided a schedule assessing the amount of building consultant and quantity surveyor time spent on the fire and structural defects. Mr Hunt assesses the time spent (in both capacities) on the structural and fire defects at 23 per cent of his firm’s fees (total $23,947.10).
[16] On that basis, the Council asks for an award of expert witness’ fees in the total sum of $52,277. It also seeks reimbursement of its filing fees on its statement of defence ($110 claimed at 42 per cent - $46.20), amended statement of defence ($110
claimed at 42 per cent - $46.20), and the strike-out application ($500 – claimed in full).
[17] Ms Mitchell and Mr Perry submit that it is within the Court’s discretion under r 14.1(1) to deal with all the costs incurred by the Council in relation to the fire and structural defects in the manner they propose, as the Council has been put to unnecessary expense in defending a much larger proceeding than that which the plaintiffs were entitled to file (a proceeding limited to weathertightness defects).
The claim to recover from the plaintiffs the costs the Council has agreed to pay to Beca and Stahlton
[18]Ms Mitchell and Mr Perry invite the Court to exercise its discretion under r
14.1 to make orders that the plaintiffs bear these costs by reimbursing the Council. They rely on the principles set out in Money World New Zealand 2000 Ltd v KVB Kunlun New Zealand Ltd, where the Court found that an unsuccessful plaintiff may be required to pay the costs of third parties joined by a successful defendant if:3
(i)The plaintiffs’ claim is effectively against the third party; or
(ii)The plaintiffs’ claim had the inevitable result of the third party being joined by the defendant.
[19]The learned authors of McGechan on Procedure say that:4
… a successful defendant should only be called on to meet a third party’s costs if the joinder was unnecessary or was for some reason unjustified.
[20] In this case, the Council says that Beca and Stahlton were joined by the Council as alleged concurrent tortfeasors and for negligent mis-statements, purely in relation to the plaintiffs’ claims relating to the fire and structural defects. The thrust of the plaintiffs’ claim against the Council was also in substance against Beca and Stahlton.
3 Money World New Zealand 2000 Ltd v KVB Kunlun New Zealand Ltd, HC Auckland CIV-2003- 404-2542, 23 September 2005, at [32]. Money World was applied in Tindall v Far North District Council, HC Auckland, CIV-2003-488-135, 25 May 2007 at [32], and affirmed by the Supreme Court in Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [22].
4 Andrew Beck and others McGechan on Procedure (online loose-leaf ed, Brookers) at [HRPt 14.08].
[21] Ms Mitchell and Mr Perry submit that it was inevitable that Beca and Stahlton, who were primarily involved in the building work that resulted in the fire and structural defects, would be joined as a result of the plaintiffs’ inclusion of those defects in the claims against the Council. They refer in support to the decision of the Court of Appeal in Weaver v Auckland Council, in which the Court found that councils often rely on producer statements when issuing building consents, so the joinder of parties who make such statements is “therefore almost inevitable in such litigation”. In such cases, it is not necessary for the third parties to “be the plaintiff’s ‘real target’”.5
[22] The Council acknowledges that it applied to strike out the fire and structural defects at the same time it joined Beca and Stahlton as third parties. However, Ms Mitchell and Mr Perry submit that the limitation issues arising were novel, and they point out that the Council’s strike-out application was ultimately opposed by the plaintiffs. They rely on the Court of Appeal decision in Weaver, where the Court found that the council’s decision to maintain its third-party claims, although ultimately unsuccessful, was justified “in the face of the plaintiffs’ obdurate refusal to withdraw its equally flawed co-ordinate primary claim.6
[23] Ms Mitchell and Mr Perry submit that it was not appropriate for the Council to wait for the outcome of its strike-out application before joining Beca and Stahlton. If the Council had been unsuccessful in its strike-out application, it would have been required to seek leave from the Court to join Beca and Stahlton (which may have been followed by separate strike-out applications by those parties). Also, joining Beca and Stahlton at a late stage may have prejudiced the trial (directed in March 2019 and due to commence in February 2021). And as a general principle all significant issues between all parties relating to claims of this nature should be dealt with in one hearing, so far as is reasonably possible.7
5 Weaver v Auckland Council [2017] NZCA 330 (2017) 24 PRNZ 379 at [45].
6 At [52].
7 Johnson v Auckland Council [2013] NZHC 1148 at [40].
The plaintiffs’ response
The Council’s claim for its own costs
[24] For the plaintiffs, Mr Rainey and Ms Grant submit that the Court does not have power to award costs on an interlocutory application which are outside the ambit of the particular interlocutory application which is before the Court.
[25] The Rules draw a distinction between costs fixed after a proceeding, and costs fixed after an opposed interlocutory application.8 Rule 14.8 states that costs on an opposed interlocutory application are to be fixed when the application is determined. By definition, that does not extend to other costs in the proceeding.9 The costs claimed for additional steps and expert advice do not follow “the event” (the interlocutory application) in accordance with the principle at r 14.2(1)(a). Rather, they are costs “in the proceeding”.
[26] Mr Rainey and Ms Grant then submit that the structural and fire defects remain a part of the claim as pleaded anyway. The plaintiffs filed a second amended statement of claim, in which the elements that were struck out from the earlier statement of claim had been retained (as elements of the plaintiffs’ weathertightness claims). The plaintiffs contend that it remains necessary for matters affecting the structural integrity and fire safety of the buildings to be addressed as an integral part of the remedial work required to fix the weathertightness defects and damage in the buildings.
[27] The plaintiffs intend to call expert evidence at trial about the structural and passive fire deficiencies in the complex, and the connection between those items and the weathertightness defects in terms of the remedial work required. That evidence will be necessary to prove the allegations in the second amended statement of claim. It is also anticipated that the Council will wish to call its own expert evidence directed to those issues. The expert advice it has obtained to date has therefore been validly procured, and remains germane to its defence at trial and the issues the Court will be
8 See for example, r 14.2, which treats proceedings and interlocutory applications as separate and distinct. The rule is concerned with “each step reasonably required in relation to the proceeding or interlocutory application”.
9 Referring to Winton v Winton [2018] NZHC 486 (2018) 24 PRNZ 1 at [28] and Young v TVNZ
[2012] NZHC 3460 at [13].
required to determine. The expert fees incurred by the Council have not been “unnecessarily incurred” as it claims.
[28] Quite apart from the lack of jurisdiction to make the costs orders sought for attendances and expert evidence which were not related to the strike-out application, the Council’s approach of pro-rating the steps and costs allocations between the struck- out defects and the ongoing claims, and as between the third-party claims, lacks any proper foundation or judicial support. The Council chose to take additional steps on account of the rest of the claim, not in relation to the strike-out application.
[29] On the detail of the Council’s claim for expert costs, Mr Rainey and Ms Grant point out that $30,023 of the costs claimed are for work performed by the experts in May, June and July 2020, over six months after the date of the strike-out applications. That illustrates the lack of connection between those costs and the strike-out application, and reinforces the plaintiffs’ point that the additional costs sought are costs in the proceeding generally.
The Council’s claim to recover the costs payable to Beca and Stahlton
[30] Mr Rainey and Ms Grant refer to Sim’s Court Practice, where the authors state:10
Where the plaintiff is unsuccessful it will normally have to pay the third party’s costs either directly or as part of the costs payable to the defendant. Where the causes of action are disjunctive and the claim against the third party could have awaited the outcome of the claim by plaintiff against defendant, the defendant may be required to meet the third party’s costs …
(emphasis added)
[31] They submit that it was not “inevitable” for the Council to join Beca and Stahlton as third parties in response to the claim. That argument runs counter to the Court’s express finding in the judgment that the third party claims against Beca and Stahlton would have been struck out even if the Council’s strike-out application had failed. The Council’s joinder of Beca and Stahlton was both unnecessary and unjustified. As the Court held, those claims were doomed from the start for reasons
10 Sim’s Court Practice (NZ) (online ed, Lexis Nexis) at High Court Rules 14.1.5.
unconnected to the plaintiffs’ claim, and it would be unreasonable to visit the third parties’ costs on the plaintiffs in those circumstances.
[32] Mr Rainey and Ms Grant note that the Council issued its third party claims against Beca and Stahlton on the same day that it filed its strike-out application against the plaintiffs. They submit that it made no sense for the Council to issue the third-party claims against Beca and Stahlton ahead of having its own limitation defence to the relevant defects considered and determined by the Court. The Council effectively chose to take the risk of the third-party claims being struck out – it could have waited until the Court had issued its judgment on the Council’s strike-out application before commencing either of those third party claims.
[33] Also, it was open to the Council to have reached agreement with Beca and Stahlton that they need not file statements of defence pending the Court’s decision on the limitation issues raised by the Council’s strike-out application. But the Council did not do that. Beca and Stahlton each incurred costs filing a statement of defence, and at the same time they each filed applications to strike out the third party claims against them on limitation grounds. That was entirely predictable.
[34] Weir v Karam11 is directly applicable on the facts in this case. There was no real disadvantage to the Council in awaiting the outcome of its own application to strike out the plaintiffs’ claims in relation to the structural and passive fire defects before embroiling the two third parties in litigation that was unnecessary. As in Weir, the Council retains liability for the third parties’ costs where the joinder was unjustified.
[35] Finally, Mr Rainey and Ms Grant noted that, unbeknown to the plaintiffs, Stahlton sought a 50 per cent uplift in the costs claimed by it for steps taken between 18 November and 5 December 2019, due to the Council’s rejection of an offer Stahlton had made to accept a discontinuance of the claim against it with no issue of costs. The decision to reject that offer was made by the Council alone, and the plaintiffs should not have to bear any responsibility for the resulting uplift in costs.
11 Weir v Karam HC Auckland CP 139/98, 13 December 2000.
Discussion and conclusions
The Council’s own costs
[36] I accept the submissions of Mr Rainey and Ms Grant on this issue. The award of costs should be confined to the particular interlocutory application on which the Council succeeded.
[37] Rule 14.1 makes a clear distinction between costs “of a proceeding”, and costs “of a step in a proceeding”, and r 14.2 distinguishes between steps reasonably required “in relation to the proceeding”, and steps reasonably required in relation to “an interlocutory application” (r 14.2(1)(a) and r 14.2(d)). The only jurisdiction I am presently required to exercise, is the jurisdiction in r 14.8 to award costs on an interlocutory application (the strike out application). I do not think it appropriate to do more than that.
[38] That view is supported by the two authorities referred to by Mr Rainey and Ms Grant, Winton v Winton and Young v TVNZ.12 In Winton v Winton, Grice J dealt with an application for costs on certain interlocutory applications that had been part heard, but were resolved without the need for a further hearing. Her Honour dealt with those applications, and went on to say:13
In the defendant’s application for costs, she also applies for costs for the filing of amended pleadings. That it outside the ambit of this application, and has not been dealt with for that reason.
[39] In Young v TVNZ, Gilbert J dealt with applications for costs on six interlocutory applications in a defamation case. His Honour said:14
The defendants have sought costs for steps taken in the proceeding prior to the interlocutory applications dealt with in my judgment. The costs of these earlier steps should be left for later determination.
[40] Quite apart from those considerations, the Council has not referred to any authority that might support the proposed apportionment of its costs in respect of earlier steps in the proceeding that were partly concerned with the alleged defects
12 Winton v Winton and Young v TVNZ, above n 9.
13 Winton v Winton, above n 9, at [28].
14 Young v TVNZ, above n 9, at [13].
which I struck out in the judgment. Furthermore, there is no proper basis for making assumptions such as the proposition that, because 42 per cent (by number) of the 33 originally pleaded defects were struck out, the Court can and should assume that the defendant and its counsel and expert witnesses applied 42 per cent of their time on the 14 defects that were eventually struck out. Without evidence on the point, there is no necessary correlation between the number of defects that were struck out (as a proportion of all of the defects that were originally pleaded) and the proportion of total time spent on those defects. It is impossible to say that a disproportionate amount of time might not have been spent on alleged defects that were not struck out.
[41] I also accept the plaintiffs’ submission that there may be issues at trial, arising from the plaintiffs’ statement of claim as repleaded after the judgment, which may “bring back into play” expert evidence relating to the defects that have been struck out (as quantum items in the assessment of the plaintiffs’ damages claim for weathertightness defects). If that turns out to be the case, it is not clear that time spent by the Council on the struck-out defects would have been wasted.
[42] Having regard to all of those considerations, I assess the Council’s claim for costs, limited to the strike-out application, in the sum of $8,150, made up as follows:
1 Costs on filing the strike-out application $1,338 2
Preparation of written submissions for the strike-out hearing
$3,585
3
Preparation of bundle for the strike-out hearing
$1,434
4
Appearance at the hearing of the strike-out application
$1,793
Total
$8,150
[43] In addition, the Council is entitled to $500 for the filing fee on the strike-out application, as Mr Rainey and Ms Grant acknowledged.
[44] The total award for the Council’s costs and disbursements on the strike-out application is, then, $8,650. All other costs sought by the Council in the proceeding to date, and its claim for witnesses’ expenses and other disbursements so far incurred in the proceeding, are reserved.
The Council’s claim to recover the costs payable to Beca and Stahlton
[45] I accept that there is jurisdiction for the Court to order the plaintiffs to meet these costs.
[46] In Money World New Zealand 2000 Ltd, Laurenson J considered that in the normal course a successful defendant will have to expect an order for costs in favour of a third party joined by that defendant. If however, the thrust of the plaintiff’s claim is in substance against the third party, if the plaintiffs’ claim has the inevitable result of further parties being joined, then the unsuccessful plaintiff may be ordered to pay the third party’s costs direct.15
[47] More recently, the Court of Appeal in Weaver v Auckland Council has authoritatively set out the relevant principles. In Weaver, the Court noted that the general principle is that a successful defendant will only be called on to meet a third party’s costs if the joinder of that party was unnecessary to the defence, or was for some other reason unjustified.16
[48] In Weaver, the appellants had sued the council for alleged negligence in the issue of building consents for an alternative solution in relation to the stone cladding applied to the dwelling acquired by the appellants. The council had issued a third party claim against Flexco, the supplier of the relevant sealing system, alleging negligent mis-statement in a statement provided by it to support the application for the building consent. The council’s third party claim against Flexco failed, as the trial Judge found that if the stone cladding system had been installed in accordance with the building consent as approved, using Flexco’s sealing system, the stone cladding would not have failed.
15 Money World New Zealand 2000 Ltd v KVB Kunlun New Zealand Ltd, above n 3, referred to in
Tindall v Far North District Council, above n 3, at [32].
16 Weaver v Auckland Council, above n 5, at [43].
[49] The Court of Appeal noted that councils will often rely on producer statements in relation to materials and systems relevant to the issue of building consents.17 The Court went on to say:18
The joinder of those who make such statements is therefore almost inevitable in such litigation. It is not necessary that the third party be the plaintiff’s “real target”. Joinder of such parties is still properly seen as justified even where the alleged liability is shared or concurrent.
[50] The Court of Appeal considered that there was an obvious nexus between the appellants’ claim and Flexco’s contribution to the problem had the council been found liable in negligence, as the relevant specifications were Flexco’s. The Court went on to say:
… The authorities are clear however that a successful defendant can expect an unsuccessful plaintiff to meet all of the costs of a third party reasonably and justifiably joined by that defendant unless there is some particular reason not to adopt that approach …
[51] The Court of Appeal in Weaver considered that the Council should have realised after the exchange of discovery and evidence that its claim could not succeed, and that there came a point in the proceedings where the joinder could no longer be considered reasonable or justified.19
[52] Although in this case there was theoretically an “obvious nexus” between the Council’s alleged negligence in relation to the fire and structural defects and the work undertaken by Beca and Stahlton, the point at which the Council’s third party claims could not succeed against those parties did not come at a later point in the proceedings; it was evident from the start.
[53] The authorities are clear that longstop provisions apply to contribution claims such as that made by the Council against both Beca and Stahlton.20 Section 393(2) of the Building Act 2004 provides that no relief may be granted in respect of civil
17 Weaver v Auckland Council, above n 5, at [45].
18 At [45].
19 At [46].
20 Dustin v Weathertight Homes Resolution Services HC Auckland CIV-2006-404-276, 25 May 2006; Carter Holt Harvey Ltd v Genesis Power Ltd (No. 8) HC Auckland CIV-2001-404-1974, 29 August 2008; Body Corporate 169791 v Auckland City Council HC Auckland CIV-2004-404- 5225, 17 August 2010; Minister of Education v James Hardie New Zealand [2018] NZHC 22.
proceedings relating to building work when brought after ten years or more from the date of the act or omission on which the proceedings are based.
[54] As I found in the judgment,21 the third party claims against Beca and Stahlton did not raise weathertightness issues, and they were therefore not subject to s 37 of the Weathertight Homes Resolution Services Act 2006 (WHRSA). The 10 year longstop provided by the Building Act was applicable, and Beca and Stahlton were entitled to rely on it. The Council was never going to succeed in pursuing a claim against Beca or Stahlton, as their relevant acts or omissions took place more than 10 years earlier.
[55] Nor do I consider that there was any good argument that the third party claims could have been caught by s 37 of the WHRSA. It was the Council’s position that the fire and structural defects were separate and unconnected to the weathertightness defects, and as I found in the judgment that was the position when the Council chose to issue its third party claims against Beca and Stahlton.
[56] The fire and structural defects were added in the plaintiffs’ amended statement of claim dated 12 April 2019, and the effect of that pleading was that they were simply defects that had to be repaired in order for the weathertightness remedial work to receive the necessary Council building consent. Unlike in Heaney v Auckland Council, where there was nothing to suggest the third party claims did not arise from weathertightness issues (and the Judge held that a third party could be joined after the expiry of the 10 year long stop),22 it was or should have been clear to the Council that its claims against Beca and Stahlton were not weathertightness-related. On the plaintiffs’ pleadings as they then stood, it could not be said that there was a possibility that the fire and structural defects may have been subject to s 37 of the WHRSA.
[57] I acknowledge that in Weaver the Court noted the inevitability of a defendant council joining parties responsible for producer statements on which it had relied in the issuing of building consents, and that the joinder of such parties could be “properly seen as justified even where the alleged liability is shared or concurrent”.23 But there
21 Body Corporate 378351 v Auckland Council [2020] NZHC 1701 at [116].
22 Heaney v Auckland Council [2018] NZHC 2738 at [28].
23 Weaver v Auckland Council, above n 1, at [45].
was apparently no clear limitation defence to the third party claims in Weaver, and in this case I think the existence of a clear limitation defence for the third parties rendered the claims against them unjustified.
[58] For those reasons, I decline to order that the plaintiffs must pay the third parties’ costs.
Result
[59]I make the following orders:
(1)The plaintiffs are to pay the Council $8,650 for the Council’s (scale) costs and disbursements on the strike-out application.
(2)All other costs sought by the Council in relation to the proceeding to date, and its claim for witnesses’ expenses and other disbursements so far incurred, are reserved.
(3)Beca and Stahlton are entitled to costs from the Council on their applications to strike out the third party claims made against them by the Council, and their other costs in the proceeding to date, in the respective sums of $14,750.94 and $17,798.46.
(4)The plaintiffs are not liable to reimburse the Council for the costs of Beca and Stahlton referred to (3) above.
Associate Judge Smith
SCHEDULE A
Step Action Date Cat and time
claimed
Daily rate Time Allotment Subtotal Applicable percentage Adjusted total Steps taken
2 Commencement of defence by
defendant
8.11.18 2B $2,230 2 $4,460 42% $1,873 21 Inspection of documents 00.05.19 2B $2,230 1.5 $3,345 42% $1,405 9 Pleading in response to
amended pleading (payable regardless of outcome except when formal or
consented to)
24.05.19 2B $2,230 0.6 $1,338 42% $562 20 List of documents on discovery 31.05.19 2B $2,230 2.5 $5,575 42% $2,342 22 Filing interlocutory application 14.06.19 2B $2,230 0.6 $1,338 100% $1,338 6 Third party notice and statement of
claim
14.06.19 2B $2,230 2.4 $5,352 13% $696 11 Filing
memorandum for first or subsequent case management
conference or mentions hearing
21.08.19 2B $2,390 0.4 $956 42% $402 13 Appearance at first or subsequent case management
conference
23.08.19 2B $2,390 0.3 $717 42% $301 21 Inspection of documents 05.11.19 2B $2,390 1.5 $3,585 42% $1,506 24 Preparation of written
submissions
14.11.19 2B $2,390 1.5 $3,585 100% $3,585 25 Preparation by
applicant of bundle for hearing
14.11.19/
22.11.19
2B $2,390 0.6 $1,434 100% $1,434 26 Appearance at hearing of defended
application for sole or principal counsel
05.12.19 2B $2,390 0.75 $1,793 100% $1,793
Total scaled costs $33,478 $17,237 Total expert fees $140,614 $52,277 Total disbursements $720 $592 Grand Total $174,812 $70,106
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