Bolstad v Earthquake Commission

[2019] NZHC 3283

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-201

[2019] NZHC 3283

BETWEEN

FRANCESCO AQUILA BOLSTAD

Plaintiff

AND

THE EARTHQUAKE COMMISSION

First Defendant

AND

TOWER INSURANCE LIMITED

Second Defendant

Hearing:

9 December 2019

(By way of telephone conference)

Appearances:

G Shand for Plaintiff

No appearance for First Defendant - abiding M C Harris for Second Defendant

Judgment:

12 December 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 12 December 2019 at 3.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 12 December 2019

BOLSTAD v THE EARTHQUAKE COMMISSION [2019] NZHC 3283 [12 December 2019]

Introduction

[1]    The plaintiff has applied to transfer this proceeding to the Canterbury Earthquakes  Insurance Tribunal  (“the Tribunal”).  The application is  made under s 16 of the Canterbury Earthquakes Insurance Tribunal Act 2019 (“the Act”).

[2]    The  first  defendant,   the  Earthquake  Commission  (“EQC”),  has   filed    a memorandum advising that it will abide the decision of the Court in respect of transfer and on that basis did not take part in the telephone conference at which     the plaintiff’s application was considered.

[3]    The second defendant, Tower Insurance Ltd (“Tower”), opposes the application.

[4]    Tower did not suggest that the proceeding did not meet the eligibility criteria for transfer under ss 8 and 9 of the Act. The focus of the submission was on whether transfer was in the interests of justice, that being the key consideration under s 16(2)(c) of the Act.

Context

[5]    This proceeding was commenced in early April 2018. At issue in the proceeding is a two story dwelling constructed around 1930. It is not in issue that  the building suffered damage in the Canterbury Earthquake Sequence.

[6]    In a Minute issued at the end of May 2019, Whata J set this matter down for  a hearing and directed a close of pleadings date of 31 July 2019. The parties have been offered a trial date of 3 August 2020. The parties on 16 October 2019 attended a judicial settlement conference which was unfortunately unsuccessful.

[7]    The parties filed a comprehensive joint memorandum for the first case management conference. The parties identified that one of the issues in the proceeding was “what natural disaster damage (if any) occurred to the house as the direct result of” the Canterbury Earthquakes.

[8]    The timetable agreed for the first case management conference required the parties’ structural engineering experts to meet at the site to discuss the extent to which they agreed or disagreed about the natural disaster damage to the house and the appropriate repair strategy for that damage and to then complete a joint report in accordance with sch 4 of the High Court Rules 2016 identifying the earthquake damage to the house, the appropriate repair strategy and areas of agreement and disagreement and where there was disagreement the reasons for that. That process was then to feed into the preparation of costings.

[9]    Schedule 4 is the code of conduct for expert witnesses. The schedule at cl 6 under the heading “Duty to Confer” requires experts to try to reach agreement with other experts and to prepare and sign a joint report.

[10]   Gendall J in a Minute of 8 June 2018, made directions as agreed by the parties, including the preparation of the joint expert report (“JER”).

[11]   The status of joint expert reports is provided for in the Rules at rr 9.44 and 9.45.

[12]Rule 9.45(1)(b) provides that:

A joint witness statement prepared by expert witnesses under rule 9.44 … may be produced in evidence by any expert witness who signed the statement.

[13]   The JER completed in accordance with this direction was filed with the Court on 9 July 2019 but is dated 27 March 2019. It is the joint report of three experts, one instructed by each of the parties.

[14]   The report recorded that there were no areas of disagreement between the parties. While it identified work that had to be undertaken as part of the reinstatement strategy, in summary it concluded that some of the damage to the foundations pre-existed the Canterbury Earthquake Sequence, as did some of the dislevelment of the floor. From that it followed that the cost of rectification for pre-existing damage was not recoverable against the defendants.

[15]   The existing timetable for the exchange of evidence required the plaintiff’s evidence to have been served before now.

[16]   Associate Judge Paulsen, who chaired the unsuccessful settlement conference, issued a Minute on 16 October 2019 directing a telephone conference to make further timetabling directions and noting that he expected counsel to confer as to agreed directions.

Fundamental issue

[17]   The plaintiff does not accept the conclusions contained in the JER, however, he has not filed further evidence setting out why the JER is wrong in respect of the pre-existing damage issue. Counsel for the plaintiff says the experts were not aware of factual witnesses available to give evidence about the state of the property.

[18]   The defendants say that they are unclear as to on what the basis the plaintiff now intends to run his claim and whether the plaintiff intends to instruct a new expert. Given the JER, it is not clear to me on what basis the plaintiff’s claim could proceed without a new expert.

[19]   The plaintiff in his counsel’s memorandum seeking the transfer correctly notes that the Tribunal has an inquisitorial function and can appoint its own expert at its cost to facilitate an expert conference.

[20]   Mr Harris’ submission on behalf of Tower was that a transfer to the Tribunal in the expectation that the Tribunal would fund a further expert report in the face of the JER did not reflect the purpose for which the Tribunal was established.   Further,   Mr Harris said that this Court should not be seen as undermining the joint expert report process by ordering a transfer to the Tribunal to assist the plaintiff in undermining the report.

[21]I am inclined to agree with Mr Harris’ point of view.

[22]   Mr  Bolstad  is  presently  living  in  Japan.  He  returned  from  Japan  for  the settlement conference held in October 2019. Mr Bolstad did that against having

the JER since March 2019. If Mr Bolstad disagreed with the JER, the time to instruct another expert was when he received the report, and certainly before the settlement conference.

[23]   Mr Harris was right to point out that the parties are eight months on from having received the report. It may well be the case that as a matter of law Mr Bolstad is not bound by the JER but in the absence of any compelling reason why the report is wrong, it is hard to see why a transfer to the Tribunal apparently aimed at allowing the JER to be challenged is in the interests of justice.

[24]This factor distinguishes this case from other transfer cases such as

Kitchen v AA Insurance Ltd.1

[25]   Mr Harris advised that from his experience in the Tribunal, it was unlikely that a first conference would be available until late February  2020,  perhaps  early  March 2020. Again, this matter has been offered a fixture in August 2020.

[26]   Mr Shand, counsel for Mr Bolstad, indicated that his client may wish to represent himself. That is of course a matter for the plaintiff. It was suggested that Mr Bolstad may need to represent himself for financial reasons. That is not altogether easy to reconcile with Mr Bolstad flying back from Japan and attending a judicial settlement conference with counsel which had as one of its core documents the JER.

[27]   While I cannot speak for the Tribunal,  I have my doubts  that it  would fund a further report aimed a contradicting a joint expert report.

[28]   Mr Shand noted that when these proceedings were filed, the Tribunal did not exist, and had it existed at that time, the plaintiff would have brought the claim in the Tribunal.

[29]   Mr Harris suggests that this ground was advanced credibly for those plaintiffs who applied for transfer when the opportunity first arose in August 2019 but by implication submits that it is not now a valid consideration. I do not accept that. The

1      Kitchen v AA Insurance Ltd [2019] NZHC 1902.

parties in this case had a settlement conference which they wished to attend and deferring a transfer application until after an attempt at alternative dispute resolution is not unreasonable. The parties may also want to use interlocutory procedures in this Court before considering transfer. However, Mr Harris also submits that Mr Bolstad only decided he wanted to transfer his proceeding when it became clear that the next step for him was to file his briefs. That submission was not rebutted by Mr Shand in his submissions in reply.

[30]   Mr Shand also notes that the Tribunal provides for alternative dispute resolution in the form of mediation at the Tribunal’s cost. Mr Harris responds that the parties have already had a judicial settlement conference.

[31]   In the absence of there being some fresh evidence that would justify a further attempt at alternative dispute resolution, it seems unlikely that further attempts at alternative dispute resolution would produce a different result. It is not unusual for there to be more than one attempt at alternative dispute resolution, but generally that occurs when there has been a change in circumstances or evidence.

[32]   Mr Shand points to there being no hearing fees  payable under the Act, and    I recognise this is a factor in favour of transfer.

[33]   I have decided to decline for the moment the plaintiff’s application. I do so as it appears to be aimed at defeating the joint expert reporting process and avoiding the plaintiff serving his evidence as directed at the end of May 2019. In Cogle v IAG New Zealand Ltd, I doubted that a “tactical” application – in that case aimed at avoiding a preliminary hearing of a positive defence, was in the interests of the parties.2 In this case, the uncontradicted position of Tower is that the application to transfer is aimed at defeating the JER and avoiding the need to file evidence. Transfer at this time for the purposes identified by Mr Harris would not be consistent with the “fair, speedy, flexible, and cost-effective” resolution of the claim.3

2      Cogle v IAG New Zealand Ltd [2019] NZHC 3049.

3      Canterbury Earthquakes Insurance Tribunal Act 20019, s 3.

[34]   Both defendants refer to the fact that the plaintiff has not served a new engineering report offering a different opinion to the one his expert accepted in the JER or other evidence as to why the JER  is  wrong.  Accordingly, the  Court and  the defendants do not have a full picture of the plaintiff’s claim. In the absence of having that full picture, determining whether transferring the claim to the Tribunal is in the interests of justice, is problematic.

[35]   Accordingly, once the plaintiff’s case is fully developed, he may re-apply for transfer.

[36]   The plaintiff is to now engage with the defendants in respect of the timing of his briefs of evidence. Mr Shand confirmed during the telephone conference that the statement of claim was not going to be amended. A joint memorandum with an agreed time is to be filed by Wednesday 18 December 2019.

Associate Judge Lester

Solicitors:

Grant Shand, Christchurch Russell McVeagh, Wellington Gilbert Walker, Auckland