Body Corporate 423090 v QBE Insurance (International) Limited

[2022] NZHC 1241

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2016-409-836

[2022] NZHC 1241

BETWEEN

BODY CORPORATE 423090

Plaintiff

AND

QBE INSURANCE (INTERNATIONAL) LIMITED

First Defendant

QBE INSURANCE (AUSTRALIA) LIMITED

Second Defendant

FORTIS CONSTRUCTION NZ LIMITED
Third Defendant

STRUCTEX HARVARD LIMITED
Fourth Defendant

CALIBRE CONSULTING LIMITED
Fifth Defendant

C1 GLOUCESTER STREET LIMITED
Sixth Defendant

ERNEST FREDERICK MICHAEL DUVAL

Seventh Defendant

STUDIO2 LIMITED

Eighth Defendant

Hearing:

30 May 2022

Appearances:

I J Thain and M J Bell for Plaintiff

C R Langstone, V S Wethey and H R Birch for First and Second Defendants
Also in Attendance: Ms C Tempest (QBE Representative)

Judgment:

30 May 2022

BODY CORPORATE 423090 v QBE INSURANCE (INTERNATIONAL) LTD [2022] NZHC 1241 [30 May
2022]

ORAL JUDGMENT OF EATON J

[1]                  This morning I have heard argument from the parties in relation to the first and second defendants’ statement of defence to the fourth amended statement of claim.

[2]                  Paragraphs within the proposed statement of  defence  are  objected  to  by Mr Thain on behalf of the plaintiff. In particular, objection is taken to a recasting of the fourth amended affirmative defence advanced by the first and second defendants. The proposed statement of defence describes the fourth affirmative defence as one of estoppel and it in essence pleads that the defendants, in reliance on the plaintiff and its agents’ representations that the proposed repair works would repair the Pacific Tower to the plaintiff’s satisfaction, paid for the repair costs in accordance with the policies and, therefore, if the repair works, or part of them, did not restore the Tower to the plaintiff’s satisfaction or were wasted works, the plaintiff is estopped from claiming the cost of any further repairs from the first and second defendants given those repairs arise solely out of decisions made by the plaintiff from which the plaintiff now seeks to resile.

[3]                  In the statement of defence to the third amended statement of claim, the first and second defendants had pleaded a fourth affirmative defence of contribution and, in essence, alleged that if the repair works that have been carried out were wasted works, which was denied by the defendants, then they were works that were authorised or supervised by the plaintiff or its agents and the first and second defendants therefore relied on the Contributory Negligence Act 1947 alleging that any such loss resulted wholly or partly from the negligence of the plaintiff in authorising or supervising the repair works.

[4]                  Mr Thain, on behalf of the plaintiff, says, firstly, that this proposed amendment is not consequential on my having granted leave to the plaintiff to file a fourth amended statement of claim, therefore, leave of this Court is required and further submits that the proposed amendments would cause significant prejudice to the plaintiff, would cause significant delay and, ultimately, is not in the interests of justice,

those being the three key factors to be considered by this Court in dealing with an application of this nature.1

[5]                  Mr Thain highlights that the previous defence was limited to the wasted works component of the plaintiff’s case and was a defence which the plaintiff was ready to respond to, it having not heard until reading the statement of defence that estoppel was being pleaded. He submits the plaintiff has called its civilian witnesses who would have been the likely key witnesses to answer any factual allegation relevant to estoppel and that if leave was granted the plaintiff would have to reconsider whether those witnesses would need to be recalled and/or carry out investigations as to what other evidence might be called to answer that claim. He submits that this would likely give rise to an application to adjourn the trial. His submission is that generally the interests of justice do not favour granting the application, it being raised as a new issue late in the day.

[6]                  Ms Wethey, on behalf of the first and second defendants, initially submitted that the introduction of the estoppel defence is a consequence of my having granted leave to the plaintiff to file the fourth amended statement of claim, but ultimately accepted that the case is really determined in relation to whether leave ought to be granted, having relation to the three critical factors. Her submission is that this application is a consequence of the late resolution with the third parties who have been introduced into these proceedings as a result of contributory negligence claims and, since the resolution which has led to those parties no longer playing a role in this case, the defendants have refocussed their contributory negligence claim and consider it more appropriately advanced as an estoppel argument. Her submission is that this is ventilated in the briefs of evidence that have been filed, is raised in the documentary evidence that has already been adduced to and has been the subject of cross- examination of the witnesses, Wong and Thompson, who have addressed process issues in their roles representing the Body Corporate and their dealings with QBE.

[7]                  Ms Wethey does not accept that there is any significant prejudice to the plaintiff as a result of the proposed amendment. She does not accept that there would be any

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

significant delay and in her submission the only additional witness who realistically might be able to address the issues is Mr Duval, as he was around and about prior to 2015, and is going to be giving evidence for QBE and will be able to address issues relevant to the proposed defence.

[8]                  Ultimately, in terms of the interests of justice question, Ms Wethey submits that this is not a new argument. It has simply been reframed in a different manner as estoppel as opposed to contributory negligence.

[9]                  In the short time available to me to consider this matter, I have formed the view that it is appropriate to grant leave to the defendants to amend and include the claim as formulated. I have not yet reached a determined view as to whether that ought to be limited to the wasted works component of the claim and I will hear counsel further on that issue in due course. My inclination is to limit the estoppel argument to the confines of the contributory negligence argument which was to the wasted works component.

[10]              Generally, my view is that, although legally different concepts, factually I do not see any great distinction in terms of the way in which the case was to be run when I look at contributory negligence versus estoppel. It is essentially a document-based case. I do not accept that there is significant prejudice to the plaintiff or the risk of significant delay in granting the application. I would certainly grant leave to the plaintiff to have time if required in order to brief witnesses or recall witnesses when answering the affirmative defence advanced by the defendants. But, standing back and looking at the overall interests of justice and ensuring that this case which has been longstanding has all the live issues before the Court for ultimate determination, I have reached the view that it is appropriate to grant the application and I do so.

[11]              Mr Thain has also taken issue in relation to non-compliance with High Court Rule 5.48 in paras 14, 21 and 35 and seeks further particulars. As was highlighted during the course of the argument, those pleadings have not changed from the third statement of defence to which the plaintiff had not sought further particulars. Whilst I agree that if further particularisation was given it would assist the parties and the

Court generally, I do not think it is a case where it is necessary for me to order those particulars and I decline to do so.

[12]              I grant leave to the first and second defendants to file the statement of defence as drafted and I am happy to hear from the parties if agreement cannot be reached as to whether the estoppel defence ought to be confined to the wasted works.

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

Eaton J

Solicitors:

DLA Piper, New Zealand, Auckland - Plaintiff

Fee Langstone, Auckland – First and Second Defendants