Body Corporate 389593 v Vero Insurance New Zealand Limited
[2019] NZHC 2807
•31 October 2019
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2018-409-176
[2019] NZHC 2807
BETWEEN BODY CORPORATE 389593
Plaintiff
AND
VERO INSURANCE NEW ZEALAND LIMITED
First Defendant
AND
THE EARTHQUAKE COMMISSION
Second Defendant
Hearing: 24 October 2019 Appearances:
B M Russell and I L Eaton for Plaintiff C M Meechan QC for First Defendant No appearance for Second Defendant
Judgment:
31 October 2019
JUDGMENT OF ASSOCIATE JUDGE LESTER
[1] This proceeding concerns a claim by the plaintiff in relation to earthquake damage to a complex of 41 units in a complex intended for occupation by people over the age of 60 years.
[2] The first defendant, Vero Insurance New Zealand Ltd (“Vero”) has sought particulars in relation to a particular group of the units, that is units 30-39 (“the units”).
[3] The plaintiff claims that the units suffered damage in the December 2011 earthquake with other units suffering damage in other events in the Canterbury Earthquake Sequence. In respect of Vero’s application for particulars and the
BODY CORPORATE 389593 v VERO INSURANCE NEW ZEALAND LIMITED [2019] NZHC 2807
[31 October 2019]
application that the plaintiff answer interrogatories, the focus is on the damage alleged to have been caused to the units in the December 2011 earthquake.
[4] At its most basic, the plaintiff’s allegation is that prior to the December 2011 earthquake, the floors of the units were level, but after the December 2011 earthquake they were out of level to the extent that the units’ foundations need to be rebuilt.
[5] Underscoring both applications is that the plaintiff acknowledges that it does not have in respect of the 10 units, any formal/specific reports confirming that the floors of the units were level prior to the December 2011 earthquake. What the plaintiff has are three Scopes of Works completed by EQC during 2011 which do not refer to the floors being out of level or the need to remediate the floor levels, or the presence of damage which might be considered consistent with the floors being out of level.
[6] The plaintiff’s concerns are summarised by the following from Ms Meechan QC’s submissions on behalf of Vero:
If in fact the plaintiff does not have any real figures for these levels and its case is based on inference or extrapolation, it should so say now. No time at trial should need to be taken up by getting to the bottom of the plaintiff’s position.
[7] As I will discuss in relation to the application for interrogatories, it seemed to me as the hearing progressed that counsel may have been, to some extent, at cross purposes in respect of what was being asked by the interrogatories.
[8]I will first consider the application for particulars.
Application for particulars
[9]The particulars sought in respect of the units are as follows:
(a)[T]he levels at each unit, namely units 30 to 39 inclusive, prior to the December 2011 earthquake. The response to this request for particulars may be provided in diagrammatic form.
(b)The levels at each unit, namely units 30 to 39 inclusive, subsequent to the December 2011 earthquake. The response to this request for particulars may be provided in diagrammatic form.
(c)What was the nature of the serious foundation damage suffered by units 30 to 39 in the December 2011 earthquake.
[10] The particulars sought would require the plaintiff to state the levels of the units before the December 2011 earthquake and after that date. The difficulty is not in the “after” figures.
[11]The particulars given by the plaintiff are as follows:
36. Units 30 to 39 came out of level during the December 2011 Earthquake Event which meant that they suffered serious foundation damage (December 2011 Damage). For these Units, the damage exceeded the amount payable under the Earthquake Commission Act for each Unit but the total of the damage did not exceed the Policy sum insured.
Particulars
(a)Prior to the December 2011 Earthquake Event, documents generated by EQC during its inspections of units 30 to 39 on 21 April 2011, 4 July 2011 and 18 November 2011 (EQC Scopes of Works) record either no foundation damage for those 10 units or insufficient foundation damage to warrant any foundation repair work.
(b)Following the December 2011 Earthquake Event, there was differential settlement in the foundations of units 30 to 39 with floor slopes exceeding 0.5%. Floor level surveys of units 30 to 39 containing floor level measurements include, but are not limited to:
(i)Batchelor McDougall Consulting report dated 19 June 2013 at page 476 of the Common Bundle (BMC Report); and
(ii)Tindus Floor Level survey dated 30 June 2014 (appended to Prendos Report at page 2125 of the Common Bundle).
(c)The serious foundation damage is that each unit came out of level with floor slopes exceeding 0.5%, as further particularised in the tables entitled “Comparison of Floor Slope Gradients noted for Units 30-39” at Appendix A.
(d)The plaintiff relies on all reports summarised in the table.
(e)The plaintiff proceeds on the basis that where no floor slope is recorded by EQC prior to the December 2011 event the floor slope measurement was at the near zero.
[12] Vero says that these particulars do not engage with the notice issued which requires particulars of the levels of the units on a “before” and “after” basis.
[13]Particulars are intended to:1
… supply an outline of the case advanced, sufficient to enable a reasonable degree of pre-trial briefing and preparation. Discovery and interrogatories are only an adjunct, not a substitute for pleading.
[14] The units were constructed in 2006. From that relatively recent construction date I assume that detailed construction drawings are available.
[15] The plaintiff’s case must be that the dislevelment measured post December 2011 is not due to building tolerances. I put to Mr Russell for the plaintiff that given that it is the plaintiff’s case that the units were level pre-December 2011 but had the dislevelment measured post December 2011 that his experts could work backwards from the post December 2011 figures to calculate what the levels were pre-December 2011 earthquake.
[16] What is not known is what the slopes expressed in terms of a percentage mean in terms of the actual number of millimetres that the floors are out of level. If the number of millimetres is in fact relatively small so that the dislevelment may not be immediately obvious to the naked eye, then that would impact on the weight to be given by to the EQC Scope of Works which did not identify the need for work on the floors. Conversely, if the number of millimetres represented by the dislevelment is significant so that it would have been quite noticeable walking around the units during the EQC inspection then that would favour the plaintiff’s case.
[17] In my view, the particulars sought are reasonable and would assist the Court and the parties’ experts in focusing on the real issues. Mr Russell did not suggest that the calculation could not be undertaken. Nor do I consider the request oppressive or an unreasonable burden on the plaintiff.2 The claim involves substantial sums, the calculation can be carried out and will assist in giving in terms of r 5.1.21, “fair notice” of the claim made given the claim is founded on the proposition that the dislevelment did not exist pre-December 2011.
1 Price Waterhouse v Fortex Group Ltd CA179/98, 30 November 1998 at 19.
2 A C Beck and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR5.21.01].
[18] Accordingly, there is an order that the plaintiff is to provide the particulars sought in the notice requiring particulars dated 29 August 2019 at paras 2.1(a) and (b). Given the plaintiff may require assistance from its experts to calculate the levels pre-December 2011 earthquake, the particulars are to be provided within 20 working days (that is by Friday 29 November 2019) Leave is reserved to seek an extension of that time if the calculation of the figures requires more time.
Interrogatories
[19] The same set of interrogatories were asked in relation to each of the 10 units, the questions being, using unit 30 as an example as follows:3
Unit 30
1.What measurements were taken after the February 2011 earthquake event and before the June 2011 earthquake event in order to establish:
(a)The amount/degree of the floor slope within the unit?
Measurements were taken by EQC during an inspection on 21 April 2011. No floor slopes were noted.
(b)The degree to which the floor level varied across the Unit?
Measurements were taken by EQC during an inspection on 21 April 2011. There was nil floor level variation.
(c)By whom were the measurements taken?
EQC.
(d)What document records the measurements taken?
The affidavit of Douglas John McDougall affirmed on 8 October 2019.
There was no floor level/foundation damage. This is reflected in EQC scope documents for unit 30 dated 21 April 2011:
EQC Statement of Claim Checklist / Repair Strategy. EQC File Note.
EQC Dwelling Inspection Checklist. EQC Cost Establishment for Dwelling.
3 Footnotes omitted.
2.What measurements were taken after the June 2011 earthquake event and before the December 2011 earthquake event in order to establish:
(a)The amount/degree of the floor slope within the unit?
After the earthquake event on 13 June 2011 measurements were taken by EQC during its inspection on 18 November 2011. No floor slopes were noted.
(b)The degree to which the floor level varied across the unit?
After the earthquake event on 13 June 2011 measurements were taken by EQC during its inspection on 18 November 2011. There was nil floor level variation.
(c)By whom were the measurements taken?
EQC.
(d)What document records the measurements taken?
There was no floor level/foundation damage. EQC’s Claim Assessment dated 18 November 2011, starting at page 109 for unit 30, does not record any floor level damage under the heading “Foundations”.
3.What measurements were taken after the December 2011 earthquake event in order to establish:
(a)The amount/degree of the floor slope within the unit?
Various engineers have conducted floor level surveys for all units including, but not limited to, a Batchelor McDougall Consulting report dated 19 June 2013 and a Tindus Floor Level Survey dated
31 June 2014. BMC recorded maximum slopes of 1% over 2+ metres.
(b)The degree to which the floor level varied across the unit?
Various engineers have conducted floor level surveys for all units including, but not limited to, a Batchelor McDougall Consulting report dated 19 June 2013 and a Tindus Floor Level Survey dated 31 June 2014. BMC recorded floor level variation of 38mm for the unit and 60mm for the building (being a duplex), Taylors for Tindus recorded floor level variation of 49mm for the unit and 60mm for the building.
(c)By whom were the measurements taken?
Various including BMC and Taylors for Tindus.
(d)What document records the measurements taken?
Various engineers have conducted floor level surveys for all units including, but not limited to, a Batchelor McDougall Consulting report dated 19 June 2013 and a Tindus Floor Level Survey dated 31 June 2014.
Principles applicable to interrogatories
[20] There was no dispute between counsel as to the applicable principles and both were content to adopt the commentary in McGechan. That said, counsel emphasised the following:
(a)The answers must be specific and substantial. They must also be complete in themselves.4
(b)The answer must not be perfunctory or evasive.5
(c)The interrogatories themselves must not be oppressive.6
(d)To require a party to answer an interrogatory question about the accuracy of a written statement prepared by others is oppressive.7
[21] McGechan records that a specific interrogatory requires a specific answer.8 An answer which generally refers to certain books, affidavits or documents does not conform to the requirements of the Rules. But a qualification or explanation may be added to an answer if it would otherwise be misleading but nonetheless the answer must still be specific and substantial. If it not possible to answer an interrogatory with complete precision, a proper attempt should nevertheless be made to provide the answer as accurately as possible.9
[22] It was common ground between counsel that the answering party must seek the information he or she is required to give. If enquiries have been made from others,
4 Station Properties Ltd v Lever Action Ltd HC Auckland CIV-2009-404-354, 27 May 2019.
5 Henwood v Radio New Zealand Ltd (1993) 7 PRNZ 160 (HC).
6 Reynolds v Calvert [2013] NZHC 3254.
7 Commerce Commission v Air New Zealand Ltd (No. 6) [2012] NZHC 2113 at [33].
8 McGechan at [HR8.39.01].
9 Henwood, at above n 5.
the answer should state that enquiries have been made and what belief he or she holds as a result.10
[23] Against that background I turn to consider the answers that have been provided. Given the questions across the ten units were the same and the responses largely the same, counsel focused on unit 30 as an appropriate example.
Question 1(a)
[24] I read this question as asking what measurements were taken in the nominated time period to establish whether the floor was out of level. The question is directed at ascertaining what measurements of floor slope were taken. I do not consider the answer engages directly with the question as I have put it.
[25] Counsel may have been at cross purposes as to what “measurements” question 1(a) was referring to. Ms Meechan said the question should be read as “What method or type of measurement was utilised?”
[26] The Body Corporate may have approached the question by asking what data was taken.
[27] It is clear from the discussions with counsel that the only inspection reports of any type that the Body Corporate is aware of are the EQC Scopes prepared prior to December 2011. The difficulty the Body Corporate faces is interpreting those reports, in the sense that it is not immediately clear whether any data on the reports could be referring to floor levels. There is not an express section of the reports dedicated to floor levels, but there is reference to foundations which may well be relevant to floor levels. The Body Corporate also relies on the fact that the reports do not disclose other damage which would be consistent with the dislevelment measured post December 2011 being present during the EQC inspection.
10 McGechan on Procedure HR8.39.04.
[28] With the answer to question 1(a) perhaps having got off on the wrong foot, that to some extent impacted on the answers to the following questions which built on the first question.
[29] Given the requirement for answers to be fulsome and if necessary require explanations, the responses given by the Body Corporate were too skeletal.
[30] Mr Russell for Body Corporate was entirely frank about the basis of the Body Corporate’s claim, the information the Body Corporate had pre-December 2011 and that Body Corporate’s case was based on inferences that it says can properly be drawn from the EQC reports. That same frankness is to be reflected in fulsome answers to the interrogatories.
[31] Question 1(b) assumes that measurements were taken to establish whether the floors were out of level in the nominated time period and if those measurements were taken, the degree to which the floor level varied across the unit.
[32] Again, from discussions with counsel as far as the Body Corporate is aware, no specific floor measurements were taken. The reports are silent as to any floor dislevelment.
[33] Question 1(c) asks who took the measurements? If a report relied on has a named author then that author should be named.
[34] The answer to question 1(d) “What documents records the measurements taken?” is not in an acceptable form. The affidavit referred to is answers to interrogatories issued to EQC. At this point those answers have not reached the Court file, but counsel made a copy available. While I can understand the shorthand of referring to EQC’s answers to interrogatories, it is not for the interrogator to sift through an affidavit to identify exactly what documents are relied on. I acknowledge that the answer does go on to refer to specific documents with specific reference to their document identifier and it may be that the addition to the reference to the EQC affidavit can be treated as a redundancy when the interrogatories are readdressed.
[35] Issues in respect of Question 2 follow a similar pattern given they are the same questions albeit covering a different time period and I do not need to repeat the comments I have made.
[36] The answer given to Question 2(d) is consistent with the Body Corporate’s position in that it identifies the factors from the report from which the Body Corporate says the inference can be drawn that there was no dislevelment prior to the December 2011 event. Again, it is not suggested that there were specific floor levels taken. The Body Corporate simply does not know if levels were taken but it is not aware of levels being taken pre-December 2011.
[37] The Body Corporate in stating in its answers that it is not aware if any specific floor testing took place, is not making a concession in that regard once and for all should further information come to light and Ms Meechan did not suggest otherwise. Comprehensive discovery from EQC on this issue will be vital. Counsel advise that discovery has been carried out informally and I can only emphasise the critical importance of EQC ensuring that all information of any sort that it has in respect of the inspections is produced.
[38] The response to Question 3(a) as criticised for the reference to “various engineers”. This issue can be summed up by the parties’ respective positions.
[39] Vero wants to be sure that no further reports “come out of the woodwork”. The plaintiff says it does not have perfect knowledge of all inspections that may have occurred in the nearly eight years since the earthquake and so cannot give an absolute answer. This can be readily dealt with in a redrafted answer.
[40] In short, in respect of this question, Vero wants to know what reports the Body Corporate has commissioned in respect of floor levels, any other reports it has in its possession in respect of floor levels and to have then described, and in any event, they should be discovered subject to issues of privilege.
[41] Ms Meechan was critical of the reference to the Tindus Report recording maximum slopes of 1.02 per cent over 2m. Mr Russell took me to the page in the Tindus Report that records that and I do not consider that this criticism is of substance.
[42] The question asks, “The amount/degree of the floor slope within the unit?”. I consider the answer has engaged with that question.
[43] Ms Meechan in her submission said the question “Simply wants to the raw information on which the assertion of dislevelment is based”.
[44] I do not consider the question in fact asks for the data behind the amount/degree of floor slope which is recorded in the question. However, further from context, the conclusions are based on the reports. This is not an improper incorporation of a document by reference to answer a question because again in my view the question does not specific ask for the underlying data, only for the amount of floor slope. That said, the answer will need to be adjusted to reflect the reference to “various engineers”.
[45] The reference to “various engineers” also impacts on the answers to questions 3(b), 3(c) and 3(d).
[46] Accordingly, I consider that it is appropriate that there be an order that the Body Corporate provide answers to the interrogatories subject to the above comments.
[47] I make the observation that I do not consider this a case where the plaintiff has been deliberately uncooperative. There was the potential for the questions to be construed in more than one way and I consider that did impact on the shape of some of the answers. That said, more fulsome answers would have communicated the Body Corporate’s position better. A negative answer, that is the Body Corporate saying that it does not know something, can be just as useful to the interrogator as a positive answer.
Costs
[48] Costs are reserved. If Vero wishes to apply for costs, it may do so by memoranda of not more than three pages within 10 working days (that is by Thursday
14 November 2019) and the Body Corporate may respond, again not more than three pages within 10 working days ((that is by Thursday 14 November 2019).
Associate Judge Lester
Solicitors:
Lane Neave, Christchurch
Anne Lindsay, Vero Insurance New Zealand Ltd, Auckland Russell McVeagh, Wellington
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