Body Corporate Number DPS 91535 v 3A Composites GmbH
[2025] NZHC 1524
•11 June 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-2509 [2025] NZHC 1524
BETWEENBODY CORPORATE NUMBER DPS 91535
First Plaintiff
ARGOSY PROPERTY NO. 1 LIMITED
Second Plaintiff
AND 3A COMPOSITES GMBH
First Defendant
TERMINUS 2 LIMITED (in liquidation) Second Defendant
SKELLERUP INDUSTRIES LIMITED
Third Defendant
Hearing: 5–6 May 2025
Appearances: D M Salmon KC, S C I Jeffs and M J F Taylor for Plaintiffs
A R Galbraith KC, J Q Wilson and S L Cahill for First Defendant M D O’Brien KC, J W J Graham and R M Irvine-Shanks for Third Defendant
Judgment: 11 June 2025
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on 11 June 2025 at 4 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
Solicitors:
Russell McVeagh, Auckland Bell Gully, Auckland
Chapman Tripp, Auckland
BODY CORPORATE NUMBER DPS 91535 v 3A COMPOSITES GMBH [2025] NZHC 1524 [11 June 2025]
Table of Contents [Para]
Introduction[1]
Submissions on representative application[7]
Representative orders sought[7]
Counterfactual[9]
Applying twice[11]
Alucobond Plus representative[16]
Particulars and discovery against represented members[20]
Disclosure sought against defendants[22]
Analysis of representative application [25]
General principles[25]
Key cases[28]
Applying twice[36]
Pleadings[38]
Application under r 4.24(a) or (b)?[43]
Common interest — threshold and suitability[47]
Irregularity and limitation impacts[58]
Disclosure sought from defendants[64]
Deadline for correcting irregularity[65]
3AC’s discovery application [68]
Introduction[68]
Analysis[74]
Result[79]
Introduction
[1] The two named plaintiffs in this proceeding own buildings that use Alucobond cladding, manufactured by the first defendant, 3A Composites GmbH (3AC):
(a)The first plaintiff is the body corporate for a three-storey apartment building in Mount Maunganui known as the Cutterscove Resort Apartments (Cutterscove Building). Alucobond PE was affixed to the exterior in 2006–2008.
(b)The second plaintiff owns two buildings that use Alucobond cladding:
(i)A property at 140 Don McKinnon Drive, Albany, Auckland with a Burger King restaurant, which had two strips of Alucobond PE totalling approximately 39 m² affixed to its exterior in 2011.
(ii)A property at 80 Favona Road, Māngere, Auckland. In 2010 or 2011, approximately 26 m² of Alucobond PE was affixed to a new pedestrian link bridge connecting two office buildings.1
[2] The second and third defendants were, at various times, importers, distributors and suppliers in New Zealand of Alucobond products. There are two such products, Alucobond PE and Alucobond Plus. They are materially different in their composition. Alucobond PE has a core of 100 per cent polyethylene (PE), and Alucobond Plus has a core of 15 per cent PE and 15 per cent polymer ethylene vinyl acetate with the balance consisting of a non-combustible mineral-filled core held together by thermoplastic resin.
[3] Following the 2017 fire at Grenfell Tower (a 24-storey high rise) in London, the plaintiffs are concerned about the risks posed by the Alucobond cladding used on their buildings. They bring this claim to address those risks, primarily seeking damages for the cost of removing and replacing the Alucobond cladding.
1 Other Alucobond cladding was affixed to the two office buildings in 2003 and is not the subject of the present claims.
[4] Under the terms of a litigation funding agreement,2 the plaintiffs wish to pursue their claims as representative proceedings on behalf of others in a similar position, against a background in which they have already failed to obtain opt out orders:
(a)In their first interlocutory application dated 22 December 2020, the first plaintiff applied under r 4.24 of the High Court Rules 2016 to bring the proceedings on an opt out basis.
(b)In a judgment dated 14 September 2024, Jagose J dismissed the application, determining that the case was not suitable for representative proceedings.3
(c)That decision was upheld by the Court of Appeal in a judgment dated 15 December 2023.4 The Court of Appeal did not consider that a representative claim of the breadth and generality proposed by the appellants would give the respondents fair notice of the nature and scale of the claims against them, and a fair opportunity to defend those claims.5 The Court of Appeal commented that, rather than individual claims commenced separately but tried together, another alternative pathway might have been an opt in proceeding but, as that approach had not been proposed by the appellants, it was not considered further.6
(d)In a case management conference on 12 June 2024, the plaintiffs advised that they intended to file an application to clarify the basis on which the claims would be pursued as a representative action under r 4.24(a). They expected to complete the process of identifying potential representative plaintiffs and buildings by mid-August 2024. Venning J noted this but was not minded to make any formal directions as to the filing of the amended representative application at the time.
2 With an Australian funder — see Body Corporate Number DPS 91535 v 3A Composites GmbH
[2023] NZCA 648, [2023] NZCCLR 27 at [33] [CA judgment].
3 Body Corporate Number DPS 91535 v 3A Composites GmbH [2022] NZHC 2355.
4 CA judgment, above n 2. No leave to appeal was sought in respect of this decision.
5 At [85].
6 At [89].
(e)In a memorandum dated 9 August 2024, counsel for the plaintiffs provided an update:
8.The plaintiffs have continued to advance the investigations necessary to prepare the application they intend to file with the Court, to clarify the basis on which they will be pursuing the claims as a representative action under r 4.24(a).
9.A significant amount of investigatory work was undertaken prior to the filing of the plaintiffs’ claim in December 2020 and subsequently. However, the plaintiffs’ decision to proceed on an “opt in” basis has required the completion of additional investigatory work.
10.This includes ensuring, so far as is possible, that all owners and leaseholders of properties which may contain Alucobond are made aware of the claim and the fact that it will no longer be proceeding on an “opt out” basis (requiring them to take active steps should they wish to participate), and conducting both documentary analysis and physical inspections (ie removing and inspecting cladding panels) of the relevant properties in order to confirm the existence of Alucobond, and the date of its supply.
11.These steps involve committees of bodies corporate, building contractors, and public, commercial and domestic owners, not all of whom move at pace. Nonetheless, the process is now well advanced, and the plaintiffs are progressing completion of the final tasks as a matter of urgency. Even with a fair wind, however, these investigations are unlikely to be completed before early November 2024.
(f)On 14 August 2024, Peters J made timetable orders requiring the application to be filed and served by 4 pm, 25 October 2024, together with any affidavits in support.
(g)The signalled interlocutory application was filed and served on the date.
[5] The first and third defendants oppose the application on the grounds that the objectives of r 4.24 are still not satisfied, and there is insufficient commonality of issues to warrant representative orders in this case. Furthermore, they say such orders cannot be pursued a second time without leave, and it is not in the interests of justice for the plaintiffs to pursue such opt in orders now.
[6] The second defendant, formerly named Kaneba Ltd (Kaneba), was placed in liquidation on 1 November 2024. The liquidator’s final report dated 1 April 2025 states that the company had ceased its activities after the underlying business was sold in 2024. In a memorandum dated 2 May 2025, counsel for the second defendant notes that, with effect from 1 November 2024, the prohibition from continuing legal proceedings applies.7 No agreement to continuation has been given by the liquidator, nor have court orders been obtained, so the stay currently bars the plaintiffs from seeking any orders against Kaneba. Accordingly, for convenience I refer to the first and third defendants together as the defendants, acknowledging that any steps against the second defendant are stayed.
Submissions on representative application
Representative orders sought
[7]The plaintiffs seek the following representative orders:
(a)Confirming that this proceeding is brought on behalf of the “Group Members” (as that term is defined in sch 2 of the application) who:
(i)have consented and are listed in sch 1; and
(ii) will consent subsequently in accordance with subpara (b) below, (together, the Consenting Group Members).
(b)If further Group Members consent to these proceedings being brought on their behalf, the plaintiffs are to file and serve an updated sch 1, including those further Group Members, no later than three months after the date these orders are made (or on such other date as the Court shall determine).
7 Companies Act 1993, s 248(1)(c).
(c)For the purposes of the Limitation Act 1950, the Limitation Act 2010, and s 43A of the Fair Trading Act 1986, the claims of all Consenting Group Members are to be taken as having been brought on the date the claim was originally filed, being 18 December 2020, and, if necessary, the orders should be backdated accordingly.
(d)The defendants shall provide the plaintiffs with copies of records in their possession as to the property addresses and customers in New Zealand to whom each of them supplied Alucobond PE and/or Alucobond Plus cladding at the relevant times, or consolidated lists of the same, within 14 days of the order.
[8] In the alternative to the orders listed in [7(a)–(c)] above, the plaintiffs seek orders that:
(a)no later than three months after the date these orders are made (or on such other date as the Court shall determine), the plaintiffs will file and serve an amended statement of claim adding any additional plaintiffs, in each case being Group Members, to this proceeding as named plaintiffs (Named Group Members); and
(b)for the purposes of the Limitation Act 1950, the Limitation Act 2010, and s 43A of the Fair Trading Act, the claims of all Named Group Members are to be taken as having been brought on the date the claim was originally filed, being 18 December 2020, and that these orders are backdated to that day accordingly.
Counterfactual
[9] The defendants say the application for representative orders should be dismissed, with the consequence that the plaintiffs will have to replead the claim in the normal way, providing proper particulars of each plaintiff’s building and related allegations. They say that the plaintiffs have already had ample time to finalise the plaintiff group and no further time should be allowed.
[10] In contrast, even if the plaintiffs’ application for representative orders is dismissed because permission for opt in orders is required under r 4.24(b), the plaintiffs contend this would make little practical difference because:
(a)Based on the case law, to correct an irregularity (the claim being representative in form without r 4.24 orders subsequently granted) the current and prospective group members must be granted a window of time to join the proceeding as represented or named co-plaintiffs.
(b)Meanwhile such prospective plaintiffs benefit from tolling for limitation purposes from commencement of the proceeding because the claim has been drafted in representative form.
(c)Subsequent procedural steps are a question of case management, which should be designed to duplicate the advantages of representative proceedings, for the same policy reasons. This can encompass, for example, stage one determination of common issues or the progression of one or more plaintiff claims on a test case basis while the balance is parked.
Applying twice
[11] The defendants say this is a second interlocutory application for representative orders under r 4.24, therefore leave is required under r 7.52.
[12] In Joseph Lynch Land Co Ltd v Lynch, the Court of Appeal considered whether points decided in interlocutory proceedings may lead to an estoppel. It said that considerable caution is necessary before coming to such a conclusion:8
8 Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37 (CA) at 43.
But the need for caution in the interlocutory field is supported by the decision of the English Court of Appeal in Bobolas v Economist Newspaper Ltd [1987] 3 All ER 121 in which the Court held that rulings made and issues decided by a Judge in the course of a trial where no final decision had been reached and a retrial had been ordered were not res judicata and were not binding at the retrial whether by way of issue estoppel or otherwise.
It is not a long step from that proposition to the proposition that ordinarily interlocutory rulings and decisions should not give rise to an issue estoppel.
[13] While interlocutory rulings will not ordinarily give rise to issue estoppel, it is generally undesirable for an issue decided by an interlocutory ruling to be relitigated in the same proceeding.9 That is addressed by r 7.52, which provides as follows:
7.52 Limitation as to second interlocutory application
(1)A party who fails on an interlocutory application must not apply again for the same or a similar order without first obtaining the leave of a Judge.
(2)A Judge may grant leave only in special circumstances.
(3)This rule does not apply to a second interlocutory application for summary judgment, in which case rule 12.4(2AA) applies.
[14] Special circumstances are wide, comprehensive and flexible words indicating something abnormal, uncommon or out of the ordinary but something less than extraordinary or unique.10
[15] The plaintiffs say that r 7.52 does not apply because the first application for representative orders was on an opt out basis, which is not the same or sufficiently similar to opt in, or orders confirming an action under r 4.24(a) as of right.
Alucobond Plus representative
[16] One of the defendants’ grounds of opposition is that neither representative plaintiff owns a building clad in Alucobond Plus.11
9 Stephenson v Jones [2014] NZHC 1604 at [7].
10 100 Investments Ltd v Walker [2023] NZHC 3740 at [10], citing Cortez Investments Ltd v Olphert & Collins [1984] 2 NZLR 434 (CA).
11 This deficiency was expressly noted by the Court of Appeal in CA judgment, above n 2, at [5]: “For example, the appellants seek to litigate claims in relation to Alucobond Plus even though that product does not appear to have been used on any of their buildings.”
[17] The plaintiffs’ primary position is that there are common issues relating to both of those products, including their fire performance, inherent suitability, and the representations made about them. Those common issues can be determined without the necessity of adding a named plaintiff with a building clad in Alucobond Plus. In the alternative, the plaintiffs would seek to join the owner of 264 Antigua Street, Christchurch as a third representative plaintiff.
[18]The defendants oppose such joinder, on the grounds of:
(a)delay (the plaintiffs were on notice of this concern since November 2021);
(b)unfair prejudice (neither the proposed additional plaintiff nor the building has been the subject of any substantive evidence against which the defendants could assess suitability); and
(c)inappropriate procedure (they chose how to proceed when filing the present application, they should not be given a further bite at the cherry, nor have they made any application for joinder accompanied by proposed amendments to the pleadings).
[19] I address these arguments in the course of analysing whether the Court should make representative orders or allow rule non-compliance to be corrected, and related issues of common interest and limitation.
Particulars and discovery against represented members
[20] In terms of the comparative suitability of the claims proceeding as a representative action or with all plaintiffs named, the defendants say they are prejudiced in a representative proceeding by discovery and particulars usually being required only from the named plaintiffs in respect of their claims.
[21] In response, the plaintiffs say both discovery and particulars can be ordered as a matter of case management.12 Although the members of the class other than the named representative are not strictly “parties” under the rules, they can be directed to provide individual discovery,13 even if that is usually deferred until stage two.14
Disclosure sought against defendants
[22] The plaintiffs seek an order that the defendants must provide copies of records in their possession as to the property addresses and customers in New Zealand to whom each of them supplied Alucobond PE and/or Alucobond Plus cladding at the relevant times, or consolidated lists of the same, within 14 days of the order.
[23] Such an order is sought so the plaintiffs can contact such eligible property owners and leaseholders before the class is closed. They seek the orders under rr 4.24 and/or 8.5, on the grounds that:
(a)such disclosure of customer records is necessary for the fair resolution of the proceeding and proportionate in its scope and impact on the defendants; and
(b)that information is not available from any other public source, because existing local authority lists held for particular locations do not cover all New Zealand locations, and often do not distinguish between the different types of aluminium composite panels; and
(c)in a representative proceeding concerning Alucobond cladding in Australia, 3AC consented to providing information as to the customers, building owners and clients to whom it supplied Alucobond.
12 R J Flowers Ltd v Burns [1987] 1 NZLR 260 (HC) at 273 in which McGechan J ordered particulars and discovery in respect of member growers; Strathboss Kiwifruit Ltd v Attorney-General [2015] NZHC 1596, (2015) 23 PRNZ 69 at [92]–[93]; and Strathboss Kiwifruit Ltd v Attorney-General [2016] NZHC 206 at [28], in which Dobson J required particulars in respect of each grower claimant; and Houghton v Saunders [2013] NZHC 1824 at [3].
13 Laura O’Gorman (ed) Sim’s Court Practice (online ed, LexisNexis) at [HCR4.24.7(c)], citing
Devcich v Cowley Stanich & Co (1997) 11 PRNZ 47 (HC).
14 CA judgment, above n 2, at [84].
[24] The defendants oppose such orders, on the grounds it is unjustified and unnecessary:
(a)it is not reasonably possible for 3AC to identify from its own business records a substantial number of the buildings on which Alucobond PE and Alucobond Plus products may be installed in New Zealand (since it is the distributors who on-sell products);
(b)to the extent that 3AC can indirectly identify the locations of some Alucobond PE or Alucobond Plus product from various of its records, such records are far less extensive than the records already publicly available through published Council lists;
(c)Skellerup Industries Ltd (Skellerup) sold its Alucobond business on 30 January 2009, so it has only limited records from that time and it received no complaints about the Alucobond products; and
(d)it is not in the interests of justice or in accordance with the purposes of the High Court Rules for the defendants to undertake this kind of exercise given the information already available to the plaintiffs.
Analysis of representative application
General principles
[25] The background to r 4.24 was explained in Cridge v Studorp Ltd.15 Rule 4.24 derived from an equitable procedure designed to facilitate the disposition of cases where the parties were so numerous the proceedings would be unmanageable if all were named. The concern not to work injustice on a defendant is met at least in part by the requirement that applicants under r 4.24 must satisfy the court as to the requisite common interest.16
15 Cridge v Studorp Ltd [2017] NZCA 376, (2017) 23 PRNZ 582.
16 Southern Response Earthquake Services Ltd v Ross [2020] NZSC 126, [2021] 1 NZLR 117 at [41]; and CA judgment, above n 2, at [24].
[26]The principles governing r 4.24 have been summarised as follows:17
(a)The rule should be applied to serve the interests of expedition and judicial economy, a key underlying reason for its existence being efficiency. A single determination of issues that are common to members of a class of claimants reduces costs, eliminates duplication of effort and avoids the risk of inconsistent findings.
(b)Access to justice is also an important consideration. Representative actions make affordable otherwise unaffordable claims that would be beyond the means of any individual claimant. Further, they deter potential wrongdoers by disabusing them of the assumption that minor but widespread harm will not result in litigation.
(c)Under the rule, the test is whether the parties to be represented have the same interest in the proceeding as the named parties.
(d)The words “same interest” extend to a significant common interest in the resolution of any question of law or fact arising in the proceeding.
(e)A representative order can be made notwithstanding that it relates only to some of the issues in the claim. It is not necessary that the common question make a complete resolution of the case, or even liability, possible.
(f)It must be for the benefit of the other members of the class that the plaintiff is able to sue in a representative capacity.
(g)The court should take a liberal and flexible approach in determining whether there is a common interest.
(h)The requisite commonality of interest is not a high threshold and the court should be wary of looking for impediments to the representative action rather than being facilitative of it.
(i)A representative action should not be allowed in circumstances that would deprive a defendant of a defence it could have relied on in a separate proceeding against one or more members of the class, or conversely allow a member of the class to succeed where they would not have succeeded had they brought an individual claim.
[27] Other guidance from the Supreme Court’s decision in Southern Response Earthquake Services Ltd v Ross includes the following:18
17 Cridge v Studorp Ltd, above n 15, at [11] (footnotes omitted), quoted in CA judgment, above n 2,
at [23].
18 Southern Response Earthquake Services Ltd v Ross, above n 16, at [98] and [100]; and CA judgment, above n 2, at [25].
Given the objectives of a representative proceeding, class size will have some relevance. In particular, an opt in approach may be the preferable option where the class is small. By that we mean where the number of members in the class is small relative to other claims and there is a natural community of interest, or, as the Court of Appeal put it, a “pre-existing connection”. … That said, class size will not necessarily be determinative.
…
… a universal approach may be appropriate where the only relief sought is declaratory or injunctive and where the outcome will affect all class members identically. That is because in those cases it may be impractical, and indeed sometimes almost impossible, to provide the necessary notice for either an opt in or opt out approach. … In these types of claims, opt in or opt out orders will be neither necessary nor conducive to a speedy and inexpensive determination.
Key cases
[28] The plaintiffs rely on three key decisions for their representative order application:
(a)The Supreme Court’s 2014 decision in Credit Suisse Private Equity LLC v Houghton,19 in which the majority upheld the Court of Appeal’s decision that time ceased to run for the identified represented class (shareholders who bought shares in the Feltex initial public offering) when the proceedings were filed and the representative order made (on the day of filing). That applied both to common issues and to individual issues, regardless of how they might be case managed by the High Court.
(b)The Court of Appeal’s 2017 decision on Cridge v Studorp Ltd,20 in which the High Court’s opt in representative order was upheld, but the cross-appeal allowed, resulting in adjustments to the opt in periods for owners of leaky homes to join the product liability claim in respect of cladding systems manufactured by James Hardie.
19 Credit Suisse Private Equity LLC v Houghton [2014] NZSC 37, [2014] 1 NZLR 541.
20 Cridge v Studorp Ltd, above n 15.
(c)The Court of Appeal’s 2019 decision in Ross v Southern Response Earthquake Services Ltd,21 in which the appeal was allowed, and orders were made replacing the High Court’s opt in representative order with an opt out representative order. The underlying claims related to settlement agreements with Southern Response in respect of insurance claims for damage caused by the Canterbury earthquakes. The claims alleged non-disclosure, undermining the finality of those settlements.
[29] In Credit Suisse, the Supreme Court observed that the question of when actions are brought for the purposes of time limits under the Limitation Act or the Fair Trading Act are a function of the rules of the Court, which determine when an action is “commenced” under r 5.25.22 A representative action is brought when the statement of claim is filed.23 The majority took the view that, if a representative order is not made until later, it may be necessary and desirable for the representative order to be backdated, to ensure that the Court’s process does not disqualify those on behalf of whom a representative proceeding is brought, should the limitation period end in the period between filing and when the representative order is made.24 The majority accepted that the policy objectives of limitation periods were satisfied by that approach.25 Allowing the representative order to toll limitation periods in that manner did not distort the operation of representative proceedings. In particular, requiring the filing of separate proceedings or joinder at the outset would largely negate the advantages of a representative proceeding and be inconsistent with the objectives in r 1.2 for the just, speedy and inexpensive determination of proceedings.26 Furthermore, it would be inappropriate to allow the opt in or opt out elements of a representative action to influence when limitation periods start to run.27 The date of the filing of the statement of claim is certain, easily ascertainable, and provides a bright line test. In contrast to that majority position, the minority (Elias CJ and
21 Ross v Southern Response Earthquake Services Ltd [2019] NZCA 431, (2019) 25 PRNZ 33.
22 Credit Suisse Private Equity LLC v Houghton, above n 19, at [125].
23 At [127], referring to rr 4.24 and 5.35 in combination.
24 At [128].
25 At [157].
26 At [158].
27 At [168].
Anderson J) would have held that a representative action was not commenced on behalf of a represented person until that person consented by opting in to the action.28
[30] In Cridge, counsel for James Hardie had argued that there was insufficient commonality of interest for representative determination.29 Instead, James Hardie submitted that a house by house investigation was the only proper and fair way of resolving the claims; assessing both liability and quantum was quintessentially an individual exercise.30 James Hardie proposed a potential case management alternative of conducting a test case first, but the Court of Appeal observed that this would involve the same work and judicial resources without the tangible benefit of generating findings binding on all.31 The Court of Appeal ultimately upheld the representative order made by the High Court, thereby rendering academic a decision by Thomas J about precautionary orders (sought to apply if the representative order was not granted).32 The Court of Appeal nevertheless considered those issues, because they were novel and of general importance. It noted that, if client consent has been given, a plaintiff may file a representative proceeding as of right.33 Even where a representative proceeding has been filed as of right, it may not be allowed to proceed on a representative basis if the Court later considers that those consenting do not have the necessary common interest.34 Thomas J took the view that the passages in Credit Suisse (about the limitation clock stopping for those purporting to be represented), were distinguishable from a situation where no representative orders were made on filing. Thomas J’s view at that time was that, unless and until a representative order is obtained, qualifying members in the proposed class have no represented status.35 It followed that a limitation period might expire in the meantime, and a plaintiff cannot normally be added if it would defeat a limitation defence. For those reasons, Thomas J concluded that the Court had no jurisdiction to make the precautionary orders.36
28 At [10].
29 Cridge v Studorp Ltd, above n 15, at [15].
30 At [18].
31 At [39].
32 At [63].
33 At [66].
34 At [67].
35 At [71].
36 At [72].
[31] After considering the position in Canada, Queensland and the United States, the Court of Appeal in Cridge preferred an approach whereby the fact that the proceeding has been wrongly brought in representative form does not render it a nullity, and at most is treated as a procedural irregularity capable of being cured by an order giving the unnamed plaintiffs leave to be joined as named plaintiffs.37 Under this approach, the clock stops permanently and is not just “suspended”.38 The Court based this approach on a decision of the Queensland Supreme Court in Cameron v National Mutual Life Assoc of Australasia Ltd (No 2).39 Having the clock stop when representative proceedings are filed removes uncertainty and so avoids the filing of what may well turn out to be needless individual joinder applications or separate individual proceedings.40 The Court of Appeal stated:41
[83] We consider this must logically apply whenever a proceeding is commenced as a representative proceeding, regardless of whether it is judicially allowed to continue on that basis or not. That this is the logical effect of the majority reasoning was indeed expressly recognised by the minority in Credit Suisse.
…
[86] … We hold that when time stopped running under the Limitation Act for the representative owners, it stopped for everyone else on whose behalf they purported to sue and that remained the case regardless of whether a representative order was later made or not.
37 At [79].
38 At [80].
39 Cameron v National Mutual Life Assoc of Australasia Ltd (No 2) [1992] 1 Qd R 133 (SC), in which the Court declined an appeal from a decision of the Chambers Judge. The Chambers Judge upheld a Master’s decision to strike out the representative pleading but gave leave for other proprietors to provide written consent to be joined as co-plaintiffs by a specified deadline. As observed by counsel for 3A Composites GmbH, the judgment of McPherson SPJ included a finding that an action was brought on behalf of the unnamed but purportedly represented parties from the time of its institution. Moynihan J (at 144) was “inclined to [that] view”, but said he agreed generally with the reasons given by both judges. Ryan J (at 143) considered there was jurisdiction to allow joinder under Order 3 r 1 (despite limitation issues) because of “special circumstances”, namely it being clear to the defendants from the outset that all the proprietors of the specific building were asserting the claims in contract and tort, therefore no injustice was caused by correcting the irregularity of those proprietors not being named as co-plaintiffs.
40 Cridge v Studorp Ltd, above n 15, at [84].
41 Cridge v Studorp Ltd, above n 15, referencing Credit Suisse Private Equity LLC v Houghton, above n 19, at [79].
[32] The above issues were considered by the Court of Appeal in Ross v Southern Response Earthquake Services Ltd. After summarising Credit Suisse42 and Cridge,43 the Court of Appeal reached the following conclusions:44
[68] The logic underpinning this decision is that all proceedings that are filed as representative proceedings are in effect universal when they are first filed: they operate as claims brought by every member of the class sought to be represented. The effect of a subsequent opt in order is that the class is reduced to those who have opted in by the date fixed by the Court. The effect of a subsequent decision refusing leave to bring a representative proceeding is that the claimants in the class sought to be represented have filed proceedings through the plaintiffs, but cannot continue the proceedings in that way: there is a procedural irregularity which can be cured by naming those claimants as plaintiffs in the proceedings. Claimants who are named as plaintiffs in their own right will be treated as having commenced proceedings when the original proceedings were filed, for limitation purposes.
[33] The Court of Appeal took the view that the High Court has jurisdiction to entertain the claim on behalf of all of the identified claimants, treating their claims as validly commenced from the date of filing, regardless of whether a representation order is subsequently made, and regardless of the terms of that order.45 The making of representation orders is a procedural matter — a question of case management — not a matter that goes to jurisdiction.46
[34] These cases were considered by Downs J in Paine v Carter Holt Harvey Ltd.47 In that proceeding, Carter Holt submitted that the claim was an abuse of process because it had been brought in representative form without the Court’s permission. On the facts, some plaintiffs had agreed to be represented in the proceeding just before the claim was filed in June 2018. Others had consented later. Carter Holt argued that an application for permission under r 4.24(b) was a prerequisite to bringing any funded representative proceeding, which should be treated as a sui generis category irrespective of the consent of those represented.48 The Court held that permission was not required when consent of those with the same interest had been obtained.49
42 At [62]–[65].
43 At [66]–[68].
44 Ross v Southern Response Earthquake Services Ltd, above n 21 (footnote omitted).
45 At [84], referencing Cridge v Studorp Ltd, above n 15, at [86].
46 At [84].
47 Paine v Carter Holt Harvey Ltd [2019] NZHC 1614.
48 At [10].
49 At [12]–[15].
Downs J held that the observations of Thomas J in Cridge about provisional orders were not about whether court permission must be obtained under para (b) when those represented agreed to the proceedings under para (a).50 In any event, Cridge at first instance was distinguishable and spent, given the Court of Appeal’s observation:51
If consent has been given, the plaintiff may file a representative proceeding as of right. No other authority for a representative claim than that it is brought with the consent of those represented is necessary. Without consent, however, a representative claim requires a court direction.
[35] Downs J also referred to Visini v Cadman, in which the Court of Appeal held consent could be given retrospectively.52 In that case, only two of three trustee owners of residential properties initially consented to proceedings alleging breach of a duty of care owed jointly and severally to each house owner. The third trustee, Mr Wood, consented to the proceedings retrospectively. Toogood J in the High Court was satisfied, and the Court of Appeal agreed, that r 4.24(a) of the High Court Rules applied because the three trustees had the same interest in the subject matter of the proceeding and Mr Wood had later given his consent. Among other reasons, r 4.24(a) was satisfied because:53
… there is no warrant for reading a temporal limit into r 4.24 so as to exclude a retrospective consent. The rule does not require that consent be given before the proceeding is issued. The language of r 4.24(b) is consistent with the prospect of retrospective consent under r 4.24(a).
Applying twice
[36] In terms of the r 7.52 issue, I accept that the orders sought now are not the same as those sought before Jagose J and the Court of Appeal. However, taking into account the policy objectives, I consider the application is for a similar order. The preferable approach would usually be to seek opt out or opt in orders in the alternative, aiming to resolve r 4.24 representation issues one way or the other at an early stage of the proceeding. To still be considering these issues at first instance more than four years after the proceeding was commenced is inconsistent with the objectives in r 1.2 and risks real prejudice to the defendants.
50 At [18].
51 At [19]–[20], quoting Cridge v Studorp Ltd, above n 15, at [66].
52 At [15], referencing Visini v Cadman [2012] NZCA 122, (2012) 21 PRNZ 70 at [20]–[21].
53 At [20].
[37] Against that, I acknowledge that in appropriate circumstances the Court has permitted plaintiffs to propose more suitable representative orders after a first failed attempt.54 While the availability and timing of that would usually be controlled by specific court directions, the Court of Appeal referred to the possibility of opt in orders without saying or implying that the opportunity was spent, and no objection under r 7.52 was initially pleaded in the notices of opposition. In my view, that makes this situation out of the ordinary, such that r 7.52 leave should be granted so that this application is determined on the merits.
Pleadings
[38] The current second amended statement of claim is broadly similar to the earlier claim documents, save that the cause of action under the Consumer Guarantees Act 1993 has gone (reflecting the Court of Appeal’s decision striking out that cause of action in the protest to jurisdiction appeal).55
[39] The plaintiffs allege that, when installed on a building or part of a building, there is a material risk that Alucobond cladding causes and/or contributes to the rapid spread and severity of a fire. Therefore, they allege Alucobond cladding materially increases the risk of damage to building occupants, the building itself, and neighbouring buildings.
[40]There are five causes of action pleaded against the defendants:
(a)first, 3AC failed to take reasonable care in the design, manufacture and supply of Alucobond cladding, and Skellerup and Kaneba failed to take reasonable care in the importation, distribution and supply of the same;
(b)second, the defendants were negligent in making statements about the suitability, fire performance and compliance of Alucobond cladding;
54 See Southern Response Unresolved Claims Group v Southern Response Earthquake Services Ltd [2016] NZHC 245 at [109] where leave was reserved for the plaintiffs to make a further application that addressed the deficiencies identified; and Freer v Earthquake Commission [2023] NZHC 1301 at [103] where the application was adjourned to allow amendment.
55 Body Corporate Number DPS 91535 v 3A Composites GmbH [2023] NZCA 647. In Body Corporate Number DPS 91535 v 3A Composites GmbH [2024] NZSC 53, the Supreme Court dismissed an application for leave to appeal and cross-appeal.
(c)third, the defendants were negligent in failing to disclose to, or otherwise warn, Group Members that Alucobond cladding was unsuitable and unsafe;
(d)fourth, the defendants engaged in misleading or deceptive conduct by making misrepresentations, or failing to give relevant warnings, about Alucobond cladding in breach of s 9 of the Fair Trading Act; and
(e)fifth, the defendants made false or misleading representations about Alucobond cladding in breach of s 13 of the Fair Trading Act.
[41] The named plaintiffs seek damages for themselves and on behalf of each of the Consenting Group Members primarily (but not exclusively) assessed as the cost of removing and replacing the Alucobond cladding used on their buildings.
[42]The defendants deny the allegations.
Application under r 4.24(a) or (b)?
[43] Each of the Consenting Group Members listed in sch 1 to the plaintiffs’ application56 has signed a funding agreement with the litigation funder, and a retainer with Russell McVeagh, subject to the following:
(a)they say two properties were inadvertently excluded from sch 1 but have since been notified; and
(b)after the application was made, the owner of another has expressed an interest in joining.
[44] The plaintiffs say they intend to proceed with an opt in representative action under r 4.24(a), but consent might still be pending from unknown others, so they seek court orders confirming this approach and requiring consent to be confirmed from all represented plaintiffs within a specified time window of (say) three months. They say
56 Schedule 1 lists 16 different property owners/leaseholders and 18 addresses.
they are entitled to proceed in this way as of right. Case management will be a separate issue.
[45] I do not agree that the plaintiffs are entitled as of right to obtain opt in representative orders from this Court that provide for unknown further class members to consent subsequently for the following reasons:
(a)The plaintiffs may move forward as of right under r 4.24(a) with the consent of the other persons who have the same interest, which in turn refers back to “all persons with the same interest” in the chapeau of r 4.24. I accept the defendants’ submissions that this requires the consent of every member of the class.57 The authorities are clear that it is unnecessary to seek directions from the Court to proceed under r 4.24(a) in those circumstances,58 but it may be prudent to seek leave in cases of complexity.59 One reason is that, even when a proceeding has been commenced as of right, the Court may still consider whether it should proceed as a representative action.60 In this case, seeking to move forward under limb (a) inevitably leads to consideration of suitability issues (beyond the threshold question), taking into account the concerns already expressed by the High Court and Court of Appeal when declining the opt out application (addressed below).
(b)Alternatively, the plaintiffs can seek an opt in representative order under r 4.24(b) that allows for further class members to provide consent subsequently, within a specified time frame. I accept the defendants’ submissions that even one unidentified potential future consent in a pleaded class would mean that r 4.24(b) leave is required. I reject the suggestion that r 4.24(a) can be used as of right for obtaining an opt in
57 Ross v Southern Response Earthquake Services Ltd, above n 21, at [28]; Te Aka Matua o te Ture | Law Commission Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa | Class Actions and Litigation Funding (NZLC IP45, 2020) at [3.6], [4.2] at n 1, [10.6], and [12.4].
58 Just as no leave is required when proceedings are commenced by numerous named co-plaintiffs with their authority and consent.
59 Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR4.24.02].
60 Cridge v Studorp Ltd, above n 15, at [67].
order from the court, on the grounds that consent will (by definition) be given subsequently. That would undermine the court’s proper supervision of those matters, it is inconsistent with previous case law and practices recognising opt in orders as falling with subpara (b), and self-conferred opt in status (with consents still to be ascertained) would create undesirable uncertainty and unfairness for defendants. If the plaintiffs instead intended to move forward under r 4.24(a) without such unidentified persons, then this should have been done by a pleading that properly reflected that (by adapting how the plaintiff group is defined).
(c)Otherwise, the plaintiffs’ pleaded claim is non-compliant in terms of r 4.24, which requires the irregularity to be corrected.61 Given the legal principles that apply in those situations (including when representative orders have been declined), directions to case manage this situation might appear to blur the boundaries between the two limbs of r 4.24. However, responding to that circumstance is quite different in nature.
[46] In this application, the primary order sought is to proceed on a representative basis and allow further unidentified members to opt in. For the reasons explained above, an application of that type must be treated as an application under r 4.24(b) requiring permission of the Court. That in turn requires analysis of the common interest threshold and suitability requirements.
Common interest — threshold and suitability
[47] In determining the opt out application, the Court of Appeal already decided that there are issues that are common to all members of the proposed group and that the threshold had been satisfied. In particular, the Court of Appeal said under the heading “Common issues”:62
61 See [30] and [32] above.
62 CA judgment, above n 2, (footnotes omitted).
[61] We accept Mr Farmer’s submission that it is possible to identify issues that would be common to all members of the proposed group. So, for example, issue 4 in the proposed litigation plan — whether Alucobond cladding was and is goods of a kind ordinarily acquired for personal, domestic or household use or consumption — would arise in each Group Member’s claim under the Consumer Guarantees Act.
[62] The properties of the Alucobond products, including their combustibility and behaviour when exposed to fire, could also be resolved as a common issue.
[63] We also accept Mr Farmer’s submission that the threshold for establishing that Group Members have “the same interest in the subject matter of a proceeding” is not a high one. It is well established that the court should take a liberal and flexible approach in determining whether there is a common interest. The requisite commonality of interest is not a high threshold. A representative order can be made even though it relates only to some of the issues in the claim. The common question need not make a complete resolution of the case, or even liability, possible.
[64] In these circumstances, we accept that the threshold for application of r 4.24 is met: there are persons with the same interest in the subject matter of this proceeding.
[48] However, the Court of Appeal went on to consider the real question of whether the proposed representative proceeding would be an efficient use of the court’s resources. The Court of Appeal concluded it would not. Those comments include the following:
[5 … They seek to have the court determine the suitability of the Alucobond products as exterior cladding products, and their compliance with the Building Code, in buildings that have very different characteristics from their own buildings, and that use Alucobond to very different extents ranging from minor decorative features of a building through to complete exterior cladding. …
…
[67] We accept Mr Farmer’s submission that the appellants allege that Alucobond is inherently unsuitable for use as external cladding, as well as alleging that its use fails to comply with the Building Code. But inevitably a large part of the proceeding will be concerned with compliance with the Building Code. Under the Code, there are no combustibility requirements for some buildings. The requirements that apply to other buildings have varied over time, and depend on factors such as the height of the building, its distance from the boundary, its use, the external wall construction, and other fire safety measures such as sprinklers. That reflects the obvious correlation between those factors and fire safety risk.
[68] The mere fact that a cladding material is combustible does not mean that it is inherently unsuitable for all uses on all buildings: as the respondents note, wood and wood products are commonly used as a cladding material in New Zealand for a range of buildings. It is we think significant that Mr Weaver’s conclusion was not expressed at the level of generality that characterises the issues in the appellants’ litigation plan. His view, set out at
[36] above, was that “where there are combustibility requirements in the compliance documents of the New Zealand Building Code, there is no evidence that those requirements have been met for the [Alucobond products]”. He implicitly accepted that those products may be consistent with the Building Code where there are no applicable combustibility requirements. That is clear from a reading of the Code. He does not express a view about the inherent unsuitability of the Alucobond products for use as exterior cladding independent of the Building Code and its combustibility requirements, or independent of the features of the building identified at [67] above.
[69] It seems highly implausible that a single undifferentiated answer could be given to the question: “Is Alucobond inherently unsuitable for use as an exterior cladding material in any quantity and on any building?” Rather, it seems inevitable that the answer will correspond to the approach in the Building Code: that is, “it depends”.
…
[71] The existence of a material risk to people and structures of the kind that lies at the heart of the appellants’ claims does not admit of a single answer when viewed through the lens of the Building Code. Nor is there any reason to think it will admit of a single answer when viewed through the lens of inherent risk. There was no evidence before us to support such a sweeping proposition, or even to suggest that it is arguable.
[72] We are therefore sceptical about the potential for useful answers of general application to be provided at a Stage 1 hearing, in a manner that would materially contribute to resolution of individual building owners’ claims at Stage 2.
[73] Indeed it seems to us that there is a real prospect of inefficiency in the hearing of these proceedings if the Court embarks on the wide-ranging Stage 1 inquiry that the appellants contemplate. …
…
[83] … An inquiry into the risks associated with using small strips of Alucobond products for signage on a single storey Burger King restaurant in the middle of a carpark seems unlikely to shed light on the use of that product in the circumstances where the risks that are the focus of the proceeding are most likely to be material. This claim is not a promising springboard for requiring Kaneba to participate in proceedings relating to every supply it made of Alucobond, for a wide range of uses on a wide range of buildings, over a five year period.
[49]The Court of Appeal then made the following observation about opt in:
[89] An opt in proceeding might also be a workable alternative that would enable the just and efficient co-ordinated resolution of claims relating to Alucobond products. An opt in claim would enable multiple claims (including claims that might not otherwise be viable for cost reasons) to be heard together, without giving rise to the concerns identified above. But as that approach was not proposed by the appellants, we do not consider it further here.
[50] Relying on the above comment, the plaintiffs submit that the Court of Appeal’s concerns quoted in [48] above do not arise with an opt in representative action.
[51] I do not consider that is a fair reading of what the Court of Appeal said. There is one aspect that no longer arises under an opt in approach, namely the prospect of addressing all the hypothetical groupings that could occur across the entire class of buildings of different types, with different Alucobond product uses, under different building code requirements spanning many years, some of which might not ultimately have any actual represented claimants. However, the other concerns remain relevant when assessing the utility of an opt in representative proceeding and whether it would be an efficient use of the court’s resources.
[52] By reference to a table providing more detail, counsel for the plaintiffs submitted that the common issues include the properties of Alucobond products, their combustibility, fire performance characteristics, compliance with regulatory standards, and the adequacy of warnings and accuracy of representations made by the defendants. The plaintiffs envisage these issues being determined on a common basis, with individual building characteristics addressed at a later stage if required, as in Cridge. The current proposals are similar to those considered by the Court of Appeal, as listed in the schedule to that decision.
[53] Consistent with the analysis of the High Court and Court of Appeal for the opt out application, my assessment is that a representative proceeding of that type would be inefficient and is therefore unsuitable:
(a)The mere fact that cladding material is combustible does not mean that it is inherently unsuitable for all uses on all buildings. Even the plaintiffs’ expert, Mr Weaver, does not express a view about the inherent unsuitability of the Alucobond products for use as exterior cladding independent of the Building Code and its combustibility requirements, or independent of the features of the building.
(b)The existence of a material risk to people and structures of the kind that lies at the heart of the plaintiffs’ claims does not admit of a single answer, whether viewed through the lens of the Building Code or through the lens of inherent risk. Rather, it depends (among other things) on the nature and design of the building, the uses of the building, other building materials, and mitigation systems.
(c)Without a building-specific inquiry, little would be achieved by attempting a prior determination of flammability characteristics of the products per se, compliance with regulatory standards, and the adequacy of warnings or representations made by the defendants.63
[54] For the above reasons, even though the r 4.24 threshold requirement is met, I do not consider that the plaintiffs have established that a representative proceeding would be suitable as an efficient use of the Court’s resources. There has been no attempt to address the concerns listed in [48] above, such as by grouping buildings with sufficiently similar characteristics, mitigation measures and regulatory contexts. There has been no pleaded change to address the identified concerns that the representative buildings provide an unpromising springboard, and do not involve Alucobond Plus (with different combustibility characteristics).
[55] The plaintiffs have been on clear notice of these issues since 15 December 2023 at the latest when the Court of Appeal decision was published. They have had ample time to reconfigure their pleadings and litigation plan to demonstrate the
63 In the Court of Appeal judgment for the protest to jurisdiction, the court considered that questions of reliance would need to be the subject of discovery and trial: Body Corporate Number DPS 91535 v 3A Composites GmbH, above n 55, at [120].
required efficiencies, and the timetable orders recorded in June by Venning J and made in August 2024 by Peters J provided for them to do so. Instead, the present application seeks to proceed effectively on the same basis as before, with the only material change being a shift from opt out to opt in. In my view, the general comments by the Court of Appeal about the inefficiency of such an approach still apply, notwithstanding that change.
[56] For the same reasons, even if this application had been advanced as one under r 4.24(a) for those who have already consented, I would have been unwilling to endorse the suitability of the claims moving forward on a representative basis.64 Accordingly, I decline to make the orders sought in paras [1(a)–(c)] of the application, and I do not consider it appropriate to allow any further attempts at obtaining different representative orders now that there have been two failed attempts and it is already more than four years since the proceeding was commenced.65
[57] Instead, I deal with the alternative application for orders to address the irregularity of the claim being filed in representative form, but with no representative orders made.
Irregularity and limitation impacts
[58] In Cridge, the judgment refers to the clock stopping permanently and not just being “suspended”.66 However, the Court of Appeal in Cridge envisaged that the irregularity would be corrected by leave being granted for the other proprietors to be joined as co-plaintiffs by a specified deadline. That is what occurred in Cameron v National Mutual Life Assoc of Australasia Ltd (No 2).67 That is also consistent with the approach articulated in Ross v Southern Response Earthquake Services Ltd, that the effect of a subsequent decision refusing leave to bring a representative proceeding is that the claimants in the class sought to be represented have filed proceedings through the plaintiffs but cannot continue the proceedings in that way: there is a
64 See above at n 60.
65 See above at n 54.
66 See above at n 38, contrasting with the American Pipe doctrine.
67 See above at n 39.
procedural irregularity which can be cured by naming those claimants as plaintiffs in the proceedings.68
[59] In Freer v Earthquake Commission, the Court acknowledged the Supreme Court’s decision in Credit Suisse, but nonetheless considered that the appropriate date for limitation purposes was the date on which the application for representative orders was filed.69 Until that point, the plaintiffs had not purported to sue on behalf of those they later sought to represent.70
[60] The present situation is different, because the claim has been pleaded in representative form, both from the outset and in the amended claim documents. Although both the High Court and the Court of Appeal declined the application for opt out representative orders, no deadline was set for completing any joinder steps to correct the irregularity. In that respect, the situation also differs from About Image Ltd v Advaro Ltd.71 Instead, the Court of Appeal envisaged that separate proceedings would be filed, with the potential for trying such proceedings together to the extent common issues might arise.72 The Court of Appeal did not address any limitation implications arising from that procedure.
[61] In the circumstances, I accept that there is a risk of unfairness for those whom the plaintiffs have purported to represent, if they are not afforded a time-constrained deadline by which to be named as co-plaintiffs in these proceedings to correct the irregularity. Notwithstanding the Court of Appeal judgment, they might have assumed that the present application would be successful, and meanwhile needless individual joinder applications or separate individual proceedings could be avoided.73
[62] Applying the limitation principles of the Supreme Court’s majority in Credit Suisse, and following the Court of Appeal’s decisions in Cridge and Ross v Southern Response Earthquake Services Ltd, any claimants who are named as co-plaintiffs in their own right by the deadline that I specify will be treated for
68 Ross v Southern Response Earthquake Services Ltd, above n 21, at [68].
69 Freer v Earthquake Commission [2023] NZHC 3662 at [110]–[112].
70 At [112].
71 About Image Ltd v Advaro Ltd [2017] NZHC 3264 at [70].
72 CA judgment, above n 2, at [88].
73 See above at n 40.
limitation purposes as having commenced proceedings when the original claim was filed. I do not consider that this involves back-dating as such, because I am not making any representative orders. Also, the end effect in terms of time bars may depend upon the future pleading compared with the original claim (for example, new types of causes of action would likely be time barred).
[63] Before considering what a suitable deadline should be, I first address the plaintiffs’ application for disclosure.
Disclosure sought from defendants
[64] Contrary to other cases where plaintiffs lacked sufficient information to progress their claims and achieve access to justice objectives, in this case I am not satisfied that there are proper grounds for ordering disclosure from the defendants for the purposes of recruiting others to the plaintiff group:
(a)Following extensive publicity of the Grenfell Tower fire in 2017, numerous Councils in New Zealand conducted investigations into the use of Alucobond cladding products and published lists of properties that might have such cladding. On 21 June 2024, the plaintiffs provided the defendants with a list of 381 properties that they had identified from such lists published by the Auckland, Christchurch, Wellington, Dunedin, Hastings, Rotorua and Tauranga Councils. Even if there might be others outside those regions, multi-level buildings with the relevant risk factors are more likely located in cities, so this is likely to be a comprehensive set of information.
(b)In addition, the plaintiffs have been advertising this claim and the opportunity for others to join it since 2019. The High Court and Court of Appeal decisions have resulted in some publicity too.
(c)Such orders would be inconsistent with the procedural background. At the time of the Court timetable made on 14 August 2024, the plaintiffs represented that they were already “well advanced” with steps to ensure, so far as is possible, that all owners and leaseholders of
properties that may contain Alucobond products were aware of the claim and the fact that it was not proceeding on an “opt out” basis.74 The current disclosure orders were not sought at that time.
(d)The limited number of consenting plaintiffs that have come forward does not substantiate any lack of awareness or access to justice concern. Rather, it is consistent with the Councils’ assessment that no compliance action was required.75
(e)The defendants filed evidence explaining why the information sought is not readily available in their possession or control. Among other things, there is no existing list of that type. 3AC sells its products into New Zealand via distributors who might on-sell the products to other fabricators, so the ultimate use of the products might not be known to 3AC’s distributors, and may only be known to 3AC in rare cases (even then it might only duplicate information already available from the published Council lists).
Deadline for correcting irregularity
[65] The plaintiffs have requested a further three months for obtaining the disclosure and confirming the consent of all represented group members. I do not consider that such a length of time is reasonably required. In my view, no further time should reasonably be required for recruiting others (although I do not prohibit that), given the representation in August 2024 that such work was well-advanced and nearly complete.
[66] All that should remain is to correct the irregularity, with leave granted for the other owners and leaseholders to be joined as co-plaintiffs. I consider that a further period of one month from the date of this judgment is ample time, given the context.
74 See above at [4(e)].
75 CA judgment, above n 2, at [87].
[67] As noted by the Court of Appeal, by December 2023 the defendants were already prejudiced by their ability to identify and join other parties, and by practical difficulties of documents being lost or destroyed, and people with relevant knowledge being unavailable.76 Any further delays must be tightly circumscribed.
3AC’s discovery application
Introduction
[68] Also for determination in the hearing was an application by the first defendant seeking orders directing the plaintiffs to produce documents relating to their expert Mr Weaver’s peer review or certification of any buildings with Alucobond PE or Alucobond Plus cladding (even if those buildings are unconnected with the sch 1 Group Members).
[69] Mr Weaver is a chartered professional engineer with particular experience in fire engineering. He provided opinion evidence in affidavits in support of the two applications for representative orders about whether Alucobond PE and Alucobond Plus are combustible, relevant requirements of the Building Code, and (if those apply) whether they are met for the Alucobond products.77
[70] Mr Weaver referred in his first affidavit to “growing recognition that combustible ACP panels are not fit for use in external cladding in many buildings due to the risk that they fuel the rapid spread of fire”. In that affidavit, Mr Weaver concluded as follows:
58. In summary, in my opinion, based on the facts, assumptions, reasons and literature referred to above:
(a)Alucobond PE and Alucobond Plus are combustible; and
(b)when the Cutterscove complex was reclad in 2006–2008, the New Zealand Building Code relevantly required external walls and roofs to have resistance to the spread of fire, appropriate to the fire load within the building and to the proximity of other household units and other property. In my opinion the presence of Alucobond PE cladding is inconsistent with these requirements; and
76 CA judgment, above n 2, at [84].
77 See CA judgment, above n 2, at [35].
(c)where there are combustibility requirements in the compliance documents of the New Zealand Building Code, there is no evidence that those requirements have been met for Alucobond PE and Plus.
[71] 3AC recently discovered that Mr Weaver had given peer review opinions certifying as compliant the construction of two buildings that the plaintiffs now seek to include in their action. Further, Mr Weaver gave a producer statement in respect of one of those buildings. 3AC says that if Mr Weaver has given professional opinions certifying that buildings on which Alucobond PE or Alucobond Plus is fixed comply with the fire clauses of the Building Code, such opinions would be relevant to any assessment of whether:
(a)as the plaintiffs contend, the inherent unsuitability claim can be determined on a common basis; or
(b)as the defendants contend (supported by their expert fire engineering evidence) any assessment necessarily involves a building-specific evaluation of each particular building (including its use, height, building materials, and active and passive fire safety systems).
[72]Therefore, 3AC makes the following submissions for its discovery application:
(a)In circumstances where it appears that Mr Weaver may have given previous professional opinions that buildings on which Alucobond PE or Alucobond Plus are fixed comply with the fire clauses of the Building Code, Mr Weaver’s evidence may be incomplete and non-compliant with the code of conduct for expert witnesses.
(b)It is not too late for the application for the purposes of this hearing. Given the time of correspondence between the parties about these issues, there was sufficient time to complete a disclosure process before the hearing. It would be open the Court to direct that disclosure be made prior to any final determination of the representative orders application, so that the Court can be properly satisfied of the completeness and reliability of the expert evidence put before it.
(c)It is not too early for a targeted disclosure application. Professional opinions from Mr Weaver of the kind sought would underscore that the assessment of suitability and compliance with the Building Code can only be determined on a building-specific basis.
(d)The disclosure application is not too burdensome. For their part, the plaintiffs have not proposed any refinements or modifications.
[73]In opposition, the plaintiffs submit:
(a)The timing of this application is both too late to contribute to the issues at this hearing for representative orders and too early for any trial that may follow in time.
(b)The orders sought are unnecessary and disproportionate. If 3AC has concerns about Mr Weaver’s evidence, the appropriate course is to challenge the expert evidence by making submissions on admissibility and weight, which is what 3AC has effectively done in the submissions on this application.
(c)3AC’s application is directed at the plaintiffs but, in substance, seeks disclosure from Mr Weaver of documents in the possession or control of non-parties (raising issues of confidentiality and privilege). The proper procedure is under r 8.21, in which case the applicant would normally be required to meet the reasonable legal costs of a non-party.
(d)Many (if not most) of the documents responsive to 3AC’s application cannot be produced by Mr Weaver and the plaintiffs. Yet the search burden would be significant, spanning Mr Weaver’s 25-year career as a fire engineer. Fire engineering reports typically do not reference specific product brands like “Alucobond”, making identification of relevant documents practically impossible without extensive cross-referencing with often-inaccessible architectural plans and specifications.
(e)Mr Weaver has not breached the Code. In a further affidavit filed in opposition to the discovery application, Mr Weaver explains that he does not believe any qualification was required to his evidence. He notes that he was always clear that he had been involved in preparing numerous reports. He says that it is uncommon for the reports and/or architectural plans that he has reviewed to refer to Alucobond specifically. Furthermore, consistent with the plaintiffs’ approach, the defendants have not provided information of the type sought from their own experts, including Professor Torero who did not refer to his engagement by 3AC as an expert witness in the Australian proceedings relating to Alucobond.
Analysis
[74]3AC relies on:
(a)rule 9.43 of the High Court Rules and the obligation of an expert to comply with the code of conduct in sch 4, including completeness and accuracy;
(b)section 25 of the Evidence Act 2006 and the requirement of substantial helpfulness, which requires a basis for assessing admissibility and weight;78 and
(c)broad powers under r 1.5(2)(b) and under pt 8 to make discovery orders, including particular discovery under r 8.19.79
[75] I accept the plaintiffs’ submissions that discovery of this type should not be separately ordered. An interlocutory hearing of this nature does not require the final determination of the merits of the expert evidence.
78 Prattley Enterprises Ltd v Vero Insurance New Zealand Ltd [2016] NZCA 67, [2016] 2 NZLR 750 at [94].
79 See Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14] for the four-stage approach generally applied.
[76] Only a provisional assessment is required; it is highly undesirable to conduct a mini trial.80 In determining the opt out application for this proceeding, the Court of Appeal made the following observation:81
Each of the experts filed a number of further affidavits. However these are of limited assistance, in circumstances where it is not the role of the Court to resolve disputes between expert witnesses.
[77] My decision on the present applications takes the same approach. I have noted the concerns raised, but those matters do not require determination, because Mr Weaver’s evidence does not go as far as seeking to substantiate inherent unsuitability.
[78] I also consider it premature to order specific discovery prior to any general discovery order being made. The material sought may well fall outside the scope of suitable standard or tailored discovery orders (for example, they purport to extend beyond the buildings that will be the subject of the present proceeding). Appropriate disclosure in connection with the expert evidence exchanged in advance of trial is something for determination in the future, depending on who gives that evidence and what it will be.
Result
[79] To the extent it is necessary, I grant leave under r 7.52 for this interlocutory application to be brought.
[80] I dismiss the plaintiffs’ application for representative orders on an opt in basis, and/or for endorsing a representative action under r 4.24(a). I also decline to make the disclosure orders sought by the plaintiffs.
80 Freer v Earthquake Commission, above n 54, at [17], referencing Southern Response Earthquake Services Ltd v Southern Response Unresolved Claims Group [2017] NZCA 489; [2018] 2 NZLR 312 at [16].
81 CA judgment, above n 2, at [39].
[81] To address the irregularity of the proceeding being commenced in representative form but with representative status declined,82 I make orders that, no later than one month after the date of this judgment, the plaintiffs may file and serve an amended statement of claim adding any additional plaintiffs, in each case being Group Members, to this proceeding as named plaintiffs. Otherwise, any subsequent attempt at joinder may be defeated by a limitation defence without the claims of any new parties being treated as brought when the claim was originally filed in this proceeding on 18 December 2020.
[82]I dismiss 3AC’s application for discovery.
[83] If costs cannot be agreed, then the parties may file memoranda and I will determine costs on the papers.
O’Gorman J
82 At [80] above.
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