Body Corporate No. 207624 v North Shore City Council

[2013] NZHC 2052

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2007-404-004037 [2013] NZHC 2052

BETWEEN  BODY CORPORATE NO. 207624

First Plaintiff

ANDCHIA LU SYLVIA CHEN & ORS Second Plaintiffs

ANDNORTH SHORE CITY COUNCIL First Defendant

ANDA.D.C. ARCHITECTS LIMITED Second Defendant (Discontinued)

ANDHARRIS CONSULTING LIMITED Third Defendant (Struck Out)

…./Continued over page

Hearing:                   15 August 2013

Appearances:           G B Lewis for the Plaintiffs

D J Heaney QC and S B Mitchell for the First Defendant
D T Broadmore For the Fifth Defendant
J Long for the Sixth Defendant
G S A Macdonald for the Eighth Defendant

Judgment:                15 August 2013

ORAL JUDGMENT OF GILBERT J [Application for adjournment]

BODY CORPORATE NO. 207624 v CHIA LU SYLVIA CHEN & ORS [2013] NZHC 2052 [15 August 2013]

AND              STEPHEN MITCHELL

Fourth Defendant (Struck Out)

ANDBROOKFIELD MULTIPLEX CONSTRUCTIONS (NZ) LIMITED (in liquidation)

Fifth Defendant

ANDCHARCO LIMITED (in liquidation) Sixth Defendant

AND              MAXINE BRANNIGAN

Seventh Defendant (Discontinued)

ANDACE INSURANCE LIMITED Eighth Defendant

[1]      The  plaintiffs  are  the  body  corporate  and  owners  of  apartments  in  the

“Spencer on Byron”, a 22 storey building on Auckland’s North Shore constructed in

2000 and 2001.  They commenced this proceeding in July 2007, claiming against the North Shore City Council, now Auckland Council, and various other parties involved in the development and construction of the building.  Despite the proceedings having been on foot for over six years, the plaintiffs’ claims have not yet been heard, largely because the Council applied to strike out the claims against it on the basis that it did not owe a duty of care to the plaintiffs.  This application was finally determined in

the plaintiffs’ favour by the Supreme Court in October 2012.[1]

[1] Body Corporate No. 207624 v North Shore City Council [2012] NZSC 83.

[2]      The current trial date was initially allocated on 14 June 2012, at a time when the claims against the Council had been struck out.  However, on 9 November  2012, following the Supreme Court’s decision, Faire AJ confirmed this date at a conference attended  by  the  Council.  In  accordance  with  the  directions  he  made  at  that conference, the case is scheduled to be heard in the 10 week period commencing

7 October 2013.

[3]      The Council now applies for an adjournment of the trial on the following grounds:

(a)       The plaintiffs have recently re-scoped and re-costed their claim.

(b)The  Council’s  experts  advise  that  they cannot  complete  the  work necessary to re-scope the remedial works on an alternative basis by the time the trial commences.

(c)      Discovery in relation to the increased scope of remedial works has been provided recently.

(d)The insurers of the fifth defendant, Brookfield Multiplex, which was the head  contractor,  have advised  that  they would  be prepared  to

participate in a mediation but only if the hearing is adjourned.

(e)      If the Council is required to proceed with the hearing in October, it contends that it will then face further litigation in Australia or England against the insurers of the fifth defendant.

[4]      Brookfield Multiplex, which is in liquidation, is neutral as to whether an adjournment is granted.  The sixth defendant, Charco Limited, is also in liquidation. Mr Long advises that he has no instructions from the liquidators and I accordingly gave him leave to withdraw.   The eighth defendant, Ace Insurance, supports the Council’s application for an adjournment on the basis that a mediation involving Brookfield Multiplex’s  insurers  could  result  in  a  settlement.    The  plaintiffs  are strongly opposed to an adjournment being granted.

[5]      Rule 10.2 of the High Court Rules provides:

The Court may, before or at the trial, if it is in the interests of justice, postpone or adjourn the trial for any time, to any place, and upon any terms it thinks just.

[6]      I am required to consider which course best serves the interests of justice, balancing  the  interests  of  all  parties  to  the  proceeding.  Having  reviewed  the affidavits filed in support and in opposition to the application and heard counsel’s submissions, I have reached the conclusion that the application for an adjournment must be declined.  My reasons follow.

[7]      If the adjournment is granted, it is unlikely that this case will be heard until

April 2014 at the earliest.

[8]      The plaintiffs issued this proceeding over six years ago.  They are entitled to have their claims heard as soon as reasonably practicable, consistent with the requirements of justice.  They have already had to wait an exceptionally long time for this trial and it is apparent from the affidavits filed on their behalf that the delays have had a marked effect on them. A further delay of six months or more would add significantly to  the  stress  they  are  suffering  from  and  is  likely  to  increase  the financial burden on them.

[9]      The substantial delays that have already occurred give rise to the risk of injustice to  all  parties,  not  just  the plaintiffs.   This  is  not  least  because of the difficulty witnesses will have in recalling events relating to the construction of the building over 12 years ago. Any further delay will increase that risk.

[10]     Although the Council expressed reservations about whether the matter would be ready to proceed to trial at the conference on 9 November 2012, it consented to the timetable directions that were then made.

[11]     The Council did not oppose leave being granted to the plaintiffs to amend their statement of claim to its current form on 27 June 2013 which was the only amendment to the pleading filed after the setting down date.

[12]     I  am  confident  that  the  experienced  counsel  involved  in  this  case  will co-operate in ensuring that any further discovery requests are dealt with promptly.  If there are any difficulties, these can be dealt with by reserving leave to any party to make further application on short notice.

[13]     I  am  not  prepared  to  take  account  of  the  fact  that  the  insurers  of Brookfield Multiplex are prepared to participate in a mediation but only on condition that the hearing is adjourned. The insurers are not parties to this litigation.

[14]     It is also not relevant that the Council may be involved in further litigation in Australia  or  England  against  the  insurers  of  Brookfield Multiplex.     Unless  a settlement is reached with the insurers, this will be the position whether the case is heard this year or next.  In my view, it would be wrong to adjourn the case, in the face of strong opposition from the plaintiffs who have been waiting six years to have their  case  heard,  simply  because  there  is  a  possibility  it  might  settle  if  the adjournment is granted.

[15]     Mr Heaney QC advises that the real difficulty faced by Council in preparing for the current fixture centres on the increase in the scope of remedial works said to be required.  The plaintiffs claim that the balustrades and window joinery will now need  to  be  replaced.     The  Council  had  notice  of  that  change  in  scope  in

February 2013 because it was referred to in the building consent application made by the plaintiffs at that time.  However, those dealing with the litigation may not have been aware of this change until receipt of the amended statement of claim dated

28 March 2013.   The scope change increased the claim for remedial works from

$19.4 million[2] to $23.2 million.[3]

[2] Amended statement of claim dated 30 November 2012.

[3] Amended statement of claim dated 28 March 2013.  Although this figure has since been revised to $26 million in a further amended statement of claim dated 28 June 2013, this revision relates to the costs of the work rather than the scope of it and does not cause the Council any particular difficulty in preparing for trial.

[16]    Having discussed the matter with counsel, I consider that the Council’s difficulties relating to the scope of the remedial works can be accommodated by modifying the timetable for service of some of the expert briefs.  It is also likely that the start of the trial can be deferred for one or two weeks because counsel are confident that the trial will not take as long as originally anticipated.  I have invited counsel to consider proposed amendments to the timetable and the likely trial time required and to file a joint memorandum, or memoranda if they cannot agree.  I note that Mr Lewis suggested that the Council’s briefs could be served in mid to late September so long as the trial date can be delayed by one or two weeks.   While reserving his position in relation to a possible appeal from this judgment, Mr Heaney confirmed that these proposed modifications are likely to accommodate his client’s position.

Costs

[17]     Although the plaintiffs have succeeded in resisting the Council’s application for an adjournment, I consider that costs should lie where they fall in respect of it.  In all of the circumstances, it was reasonable for the Council to make the application in view of the late change to the scope of the remedial works claimed by the plaintiffs to be required.  I also take into account that the fixture was originally allocated at a time when the claims against the Council had been struck out.  Counsel opposed the current fixture being confirmed when it was brought back into the proceeding late last year.  It has succeeded to some extent on the application by demonstrating that

modifications to the trial directions are necessary.

Result

[18]     The application for adjournment is declined.

[19]     Costs are to lie where they fall in respect of this application.

[20]     I direct the registrar to arrange a pre-trial conference with the trial Judge on a date convenient to counsel in September 2013.

[21]     I reserve leave to the parties to make further application on short notice.

M A Gilbert J