Boulton v Christie
[2023] NZHC 2241
•18 August 2023
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE
CIV-2021-488-63
[2023] NZHC 2241
BETWEEN RAYMOND JOHN BOULTON
Plaintiff
AND
PAUL JAMES CHRISTIE and VICKI LOUISE CHRISTIE
First Defendants
WHANGAREI DISTRICT COUNCIL
Second Defendant
Hearing: 7 August 2023 Appearances:
Jose San Diego for the Plaintiff (by VMR) Paul Biddle for the First Defendants (by VMR)
Judgment:
18 August 2023
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[application for leave to issue third party notices]
This judgment was delivered by me on 18 August 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
Solicitors:
Cowan Law (Doug Cowan/Jose San Diego), Auckland, for the Plaintiff
Henderson Reeves (Paul Biddle/Jeremy Browne), Whangarei, for the First Defendants
BOULTON v CHRISTIE [2023] NZHC 2241 [18 August 2023]
TABLE OF CONTENTS
Paragraph
Introduction [1]
Background [2]
Mr and Mrs Christie’s application for leave to issue third party notices[7] Affidavit of Paul James Christie, dated 23 June 2023 [9] Affidavit of Sarah Jane Wainwright, dated 28 June 2023 [21]
Mr Boulton’s opposition [22]
Legal principles [23]
Analysis [26]
Mr and Mrs Christie’s submissions [28]
Issues in disputes are substantially the same [28]
Joinder of right [32]
Delay [33]
Interests of justice [35]
Mr Boulton’s complicity [39]
Mr Boulton’s submissions [41]
Result [45]
Orders [47]
Introduction
[1] Mr Paul Christie (Mr Christie) and Mrs Vicki Christie (Mrs Christie) seek an extension of time to bring third party proceedings, or alternatively, for leave to issue third party notices against three third parties — Mainmark Ground Engineering (NZ) Limited (Mainmark), Whangarei District Council (the Council) and Topp Limited (Topp) (together, the Third Parties).
Background
[2] The substantive proceeding, filed in June and served in July 2021, is for breach of contract and negligence for alleged defects in a property at 37 Lawson Drive, Tutukaka (the property) developed and sold by Mr and Mrs Christie to Mr Raymond Boulton (Mr Boulton).
[3] On 7 December 2022, Mr and Mrs Christie issued a third party claim for contribution under the Law Reform Act 1936 and in equity against Mainmark, which was served on it on 8 December 2022.
[4] On 27 February 2023, Mr and Mrs Christie issued further third party claims for contribution under the Law Reform Act 1936 and in equity against the Council and Topp, which were served on them on 1 March and 29 March 2023 respectively.
[5] Mr and Mrs Christie subsequently appreciated that those notices were invalid as the time had elapsed to file them as of right. On 4 July 2023, they then filed this application for an extension of time to bring third party proceedings, or alternatively, for leave to issue third party notices. This judgment determines that application.
[6] I note the substantive proceeding is set down for a seven-day fixture commencing 2 October 2023.
Mr and Mrs Christie’s application for leave to issue third party notices
[7]Mr and Mrs Christie seek orders:1
1 Interlocutory application on notice for leave to issue third party notices dated 4 July 2023 at [1].
(a) Under rule 1.19 extending the time for bringing third party proceedings to 7 December 2022 (in the case of Mainmark Ground Engineering (NZ) Limited) and 27 February 2023 (in the case of Whangarei District Council and Topp Limited); and extending the time for the Third Parties to file and serve defences until 10 working days after the order in (a) is made.
(b) Or in the alternative to the above, granting leave to the first defendants to issue third party notices against the first third party, Mainmark Ground Engineering (NZ) Limited, the second third party, Whangarei District Council, and the third party, Topp Limited.
(c) Or in the alternative to (a) and (b) above, granting leave to the first defendant to issue the third party notices sought above on the basis that should the Third Parties be unable or unwilling to participate in the upcoming trial on 2 October 2023, any adjournment would be only in relation to the first defendants' claim against the Third Parties and would not affect the hearing of the plaintiff's claim against the first defendants;
(d) Costs on the application (if opposed).
[8]The grounds on which the orders are sought are:2
(a) The applicants/first defendants are entitled to relief or a remedy relating to the subject matter of the proceeding from the Third Parties and the relief or remedy is substantially the same as that claimed by the plaintiff against the applicants/first defendants.
(b) The proposed Third Parties were served with the proposed third party proceedings in December 2022 and March 2023 and it is in the interests of the just, speedy and inexpensive determination of the proceeding or interlocutory application to extend time as sought.
(c) The applicants/first defendants did not issue third party notices in accordance with rule 4.4(2)(a) HCR and seek leave of the court under rule 4.4(2)(b) HCR.
(d) As appears in the memorandum of counsel filed in support of this application.
Affidavit of Paul James Christie dated 23 June 2023
[9] Mr Christie has made an affidavit in support of his and Mrs Christie’s application.3 He says he and his wife brought the property as bare land in February 2009.
2 At [2].
3 Affidavit of Paul James Christie in support of interlocutory application on notice for leave to issue third party notices dated 23 June 2023.
[10] Mr Christie deposes that in 2009, they engaged Alpha Architectural Design Limited (Alpha) as architect, Vinny Marotta of Studio Marotta (Marotta) as engineer, and Topp as the main building contractor. Topp’s construction included the property’s foundations and engineered concrete floors in accordance with the specifications submitted to the Council for building consent.
[11] Regarding the Council’s file and building consent, Mr Christie highlights the following:
(a)On 4 November 2009, Alpha completed the building consent application, which the Council approved on 15 January 2010.
(b)On 9 June 2010, an amendment was requested over the location of the dwelling based on the advice of Alpha and others, which the Council approved on 21 June 2010.
(c)The building consent required Marotta to inspect pile driving operation (the pile inspection), obtain a pile driving log (the pile log), provide a producer statement construction review (PS4) and provide a PS4 for driving piles. Mr Christie says he relied on Marotta’s advice and Topp’s construction in accordance with it in respect of the foundation and other structural works.
(d)Between January 2010 and March 2011, the house was constructed, and the Council undertook assessment, decision and inspection works.
(e)On 4 April 2011, Marotta provided a PS4 for the foundation works.
(f)On 24 June 2011, the Council issued the code compliance certificate (CCC).
(g)Marotta provided a PS4 for the foundation driven poles but did not provide the pile log. Despite this and neither Topp nor Marotta providing a PS4 for “driving piles”, the CCC was issued.
[12] Regarding the post-construction issues and remedial work, Mr Christie deposes the following:
(a)In June 2012, he noticed the front 12 metre wide ranch sliders were out of alignment, and he contacted Ken Topp (Mr Topp) from Topp, who recommended Whangarei Aluminium re-align them. Whangarei Aluminium did so and said the issue was common among large ranch sliders.
(b)Between 2013 and 2015 Whangarei Aluminium and Retro Works adjusted the ranch sliders, until in early 2015 Retro Works said they could not adjust them further and suggested the builder have a look.
(c)Both Topp and Marotta identified movement of the upper beam supporting the sliders and settlement in the floor. Marotta recommended monitoring for further movement over six months before making repair recommendations.
(d)In November 2015, after the six-month monitoring, Topp and Marotta concluded there was no further movement. Marotta prepared a remedial design and Topp undertook the works to realign the frame and add extra support to the upper beam. Neither Topp nor Marotta provided any measurements nor a report. Further, despite giving Marotta instructions to ensure consents were obtained if required, Marotta gave no advice on consents and did not apply for them.
(e)Despite the remedial works, in 2016 and 2017 further adjustments were required.
[13] Mr Christie says that in 2018 he and his wife moved to a house in Whangarei and initially used the property as a beach house. The ranch sliders still did not lock easily and there was a slight gap when they were closed.
[14] In July 2018, Mr Christie says the decision was made to sell the property, but they intended to address the issue with the ranch sliders. By this time Mr Topp was not interested in pursuing further works and instead recommended Mainmark to do floor relevelling and realignment of the sliders and joinery frames. Mainmark agreed to relevel 10 to 20 m2 of the floor after identifying slab settlement of 20 mm — work that was completed on 16 January 2019. Having paid Mainmark on 28 February 2019, Mr Christie says he assumed the floors were now fully repaired, the floor and slider appeared fixed, and they were happy to market the property for sale. Mr Christie notes that while Mainmark’s contract excluded their responsibility for consent he made a point to Mainmark to make sure that the Council’s consent be obtained if required. Mainmark gave them no advice and no consent was obtained.
[15] Mr Christie deposes that sale of the property occurred to Mr Boulton with settlement occurring on 3 May 2019. Mr Boulton then filed a claim against him, his wife, and the Council on 22 June 2021.
[16] Following initial difficulties in engaging a geotechnical expert and structural engineer, Cook Costello was engaged in August 2021. In June 2022, Cook Costello visited and inspected the property, taking samples for its geotechnical assessment. Mr Christie says a draft of Cook Costello’s report was provided in October 2022.
[17] Having discussed the report with their solicitors and Cook Costello on 3 November 2022, Mr Christie says he was advised to make a contribution claim against Mainmark for the 2019 relevelling work as there were no limitation issues. This claim was made on 7 December 2022.
[18] Mr Christie says that having discovered Marotta had ceased trading and its insurance run-off cover had expired in June 2019, they did not pursue a claim against them.
[19] Mr Christie deposes he was aware there may be a potential limitation defence for the Council and Topp and that Mr Boulton had discontinued his claim against the Council in June 2022. He and his wife were reluctant to file if limitation issues affected their claim against the Council and Topp. Although, he says they were
informed that the Court of Appeal in Beca Carter Hollings & Ferner Limited v Wellington City Council (the Beca decision) was then considering the same issue upon which they would be seeking to claim against the Council and Topp.4 The Beca decision was released on 14 December 2022 and resulted in legal advice in the New Year that their contribution claim against the Council and Topp was not time-barred. Consequently, Mr Christie says that on 25 January 2023, they instructed their solicitors to make the contribution claims against the Council and Topp, which were filed on 27 February 2023.
[20] Regarding the claims generally, Mr Christie says he and his wife relied on the professional expertise and experience of the Third Parties and Marotta. He says that if Mr Boulton is successful, they will have claims for breaches of duties against the Third Parties given they relied on the Third Parties’ expertise and advice or lack thereof regarding consents. He concludes that if this application is not granted, they will be denied their only opportunity to claim against the Third Parties for their contribution to any liability established.
Affidavit of Sarah Jane Wainwright dated 28 June 2023
[21] Ms Wainwright, a legal secretary at Mr and Mrs Christie’s lawyers (Henderson Reeves), has made an affidavit in support of their application.5 She produces two emails between Henderson Reeves and Mr Boulton’s lawyers. Henderson Reeves notified Mr Boulton’s lawyers about the Beca decision and the imminent claims against the Council and Topp. Mr Boulton’s lawyers then replied following up on their joinder saying “get them joined for your clients and active and there is plenty of time to trial”.
Mr Boulton’s opposition
[22]Mr Boulton opposes the application on the following grounds:6
4 Beca Carter Hollings & Ferner Limited v Wellington City Council [2022] NZCA 624.
5 Affidavit of Sarah Wainwright in support of interlocutory application on notice for leave to issue third party notice dated 28 June 2023.
6 Plaintiff's notice of opposition to the first defendants' interlocutory application on notice for leave to issue third party notices dated 6 July 2023 at [1]–[3].
(a) The first defendants’ delay in joining [the] Third Parties [is] unacceptable and entirely of their own making.
(b) Allowing leave to join the Third Parties at this late stage of the proceeding would unduly prejudice the firm fixture set on 2 October 2023.
(c) The interest of justice would not be met if Third Parties are joined and, consequently, the firm fixture on 2 October 2023 is adjourned. The proceeding has been in the Court system for 2 years without being disposed of.
Legal principles
[23]Rule 1.19 of the High Court Rules 2016 provides:
1.19 Extending and shortening time
(1) The court may, in its discretion, extend or shorten the time appointed by these rules, or fixed by any order, for doing any act or taking any proceeding or any step in a proceeding, on such terms (if any) as the court thinks just.
(2) The court may order an extension of time although the application for the extension is not made until after the expiration of the time appointed or fixed.
[24]Rule 4.4(2)(b) provides:
4.4 Third Parties
…
(2) A third party notice must be issued within—
(a)10 working days after the expiry of the time for filing the defendant’s statement of defence; or
(b)a longer time given by leave of the court.
[25]Rule 4.8 further provides:
4.8 Court’s power and discretion
(1) On an application seeking leave to issue a third, fourth, or subsequent party notice, the court must have regard to all relevant circumstances, including delay to the plaintiff.
(2) On the making of an application of that kind, the court may grant or refuse leave or grant leave on just terms.
Analysis
[26] As a preliminary matter, during the hearing Mr Biddle abandoned the third option set out at [7](c) above as a possible order and so only an order under [7](a) or
(b) is sought by Mr and Mrs Christie.
[27] The issue to be determined in this judgment is whether it is in the interests of justice to grant one or other of the orders sought by Mr and Mrs Christie as set out at [7](a) and (b).
Mr and Mrs Christie’s submissions
Issues in disputes are substantially the same
[28] Mr Biddle, for Mr and Mrs Christie, submits that the major benefit of the third party rules is to deal with issues that are substantially the same and can be dealt with at the one time. He refers to the decision in Dairy Containers Ltd v NZI Bank Ltd where the Court allowed the joinder of the Auditor-General by the defendant banks, emphasising that “the overriding object of the third party rules is to enable all issues to be dealt with in one action”.7
[29] Mr Biddle submits that the design and construction elements of the alleged defects being differential settlement to the foundation and floor (the Defects) are fundamental to Mr and Mrs Christie’s case. The Defects pursued by Mr Boulton against Mr and Mrs Christie are the same as those between Mr and Mrs Christie and the Third Parties.
[30] Mr Biddle submits that if leave is not granted Mr and Mrs Christie would be prejudiced because:
(a)If Mr Boulton’s claim with respect to the Defects is proven, Mr and Mrs Christie’s third party claim could not be considered contemporaneously with Mr Boulton’s claims;
7 Dairy Containers Ltd v NZI Bank Ltd [1993] 1 NZLR 160 (HC) at 164. See also Turpin v Direct Transport Ltd [1975] 2 NZLR 172 (SC) at 175.
(b)Mr and Mrs Christie would be denied the opportunity to put before the Court, contemporaneously with Mr Boulton’s claims, their contribution claims in evidence against the Third Parties.
(c)Mr and Mrs Christie would have to consider commencing separate proceedings for their third party claims and the resulting time lag between the current and new proceedings would prejudice Mr and Mrs Christie, particularly if substantial damages are awarded against them, bearing in mind the quantum claimed in this proceeding exceeds
$1.24 million. There is a further risk of the possibility the Court will reach a different result in the separate proceedings and the findings of fact in these proceedings cannot bind the Third Parties in separate proceedings.
[31]Mr Biddle submits that these factors favour granting leave as sought.
Joinder as of right
[32] Mr Biddle submits that a factor in favour of the Court exercising its discretion will be whether the Third Parties could have been joined as of right, had Mr and Mrs Christie done so within the time limit.8 Mr Biddle submits that the Third Parties could have been joined as of right if the third party notices had been issued within the prescribed time-frame. This is a factor in favour of granting the orders sought.
Delay
[33] Mr Biddle acknowledges the issue that delay is the critical consideration for determination in respect of the Court exercising its discretions under rr 1.19 and 4.8. He submits that the sequence of events resulting in the application for leave being made when it was are as follows:
(a)In August 2021, Mr and Mrs Christie’s defence was initially filed and served but Mr and Mrs Christie did not yet have advice on the Defects
8 ANZ Banking Group (NZ) Ltd v Dairy Containers Ltd CA156/92, 17 December 1992.
to the extent that third party claims could be advanced. That advice was not received until November 2022 and once the advice was to hand, there being no limitation issues, Mr and Mrs Christie acted promptly and made their claim against Mainmark on 7 December 2022.
(b)The third party claims against Topp and the Council relating to the Defects were potentially subject to the Building Act 2004 longstop limitation issues given the original construction commenced in early 2010, and the foundations were completed by June 2010. Mr and Mrs Christie delayed issuing these third party claims by some three months after receiving advice from their expert to consider the Court of Appeal’s decision in Beca in January 2023. Mr and Mrs Christie then acted quickly and instructed counsel to file contribution claims against the Council and Topp, and filed the third party claims on 27 February 2023.
[34] The delay from 27 February 2023 to Mr and Mrs Christie filing the application for leave on 4 July 2023, from the discussion with Mr Biddle at the hearing, appears to have arisen from a mistaken belief that leave had been granted.
Interests of justice
[35] Mr Biddle submits that paramount considerations for the Court are the interests of justice between all the parties, and the attainment of justice by the most efficient means. He refers to the Court of Appeal in the decision of KPMG Peat Marwick v Cory-Wright and Salmon Ltd (In Rec and In Liq), where the Court stated:9
The interests of justice between all the parties must be paramount … If there is delay it will be regrettable … but the attainment of justice by the most efficient means has to be the overriding consideration.
[36] Mr Biddle submits that the claims against the Third Parties disclose reasonable causes of action and are meritorious, as supported by the evidence of Mr Christie as to the involvement of each of the Third Parties in the house’s construction.
9 KPMG Peat Marwick v Cory-Wright and Salmon Ltd (In Rec and In Liq) CA77/94, 20 May 1994 at 5.
[37] Mr Biddle submits that the delay by Mr and Mrs Christie seeking leave is neither unexplained nor unacceptable. The pleadings set out the narrative of the steps taken by Mr and Mrs Christie in advising Mr Boulton of their intention to join the Third Parties and the progress they were making in obtaining expert advice with respect to the role of the Third Parties in relation to the Defects.
[38] Mr Biddle submits that while the delay is regrettable, it is in the interests of justice that Mr Boulton’s case on the Defects should be heard and considered contemporaneously with Mr and Mrs Christie’s contribution claims against the Third Parties.
Mr Boulton’s complicity
[39] Mr Biddle submits that Mr Boulton and his counsel have been complicit with Mr and Mrs Christie’s joining the Third Parties and were at all times alive to the issue of delay that would affect the scheduled trial date. He submits that:
(a)The third party’s claim against Mainmark was filed on 7 December 2023 and served a day later, and there was no objection by Mr Boulton;
(b)On 26 January 2023, counsel emailed Mr Boulton’s solicitor advising of Mr and Mrs Christie’s intention to make claims against the Council and Topp as a result of the Beca decision. Mr Boulton’s solicitor responded on 13 February 2023 as follows:
“… two weeks is nearly up. Are you on track? Get them joined for your clients and active and there is plenty of time to the trial.
We can address any adjustments to the trial timetable once Rice Speir and Ken Topp’s lawyers are back on the scene/on the scene. …”
(c)The claims against the Council and Topp were filed on 27 February 2023 and there was no objection to the joinder by Mr Boulton.
(d)There was a formal agreement between the parties by way of their joint memorandum of 26 May 2023. The parties sought orders to amend the timetable with respect to amended pleading matters for the Third Parties’ claims and to advise the Court of the possible effect on the trial date and the timetable. Orders were granted, subject to a trial review on 10 July 2023.
[40] Mr Biddle also refers to the decision of Hall v Hall as authority for the proposition that the Court will enforce an informal agreement between the parties as to pre-trial actions.10
Mr Boulton’s submissions
[41] Mr San Diego, for Mr Boulton, submits that the delay by Mr and Mrs Christie in bringing the application is not acceptable and that Mr and Mrs Christie have been aware of their own rights to bring a proceeding against the Third Parties as early as November 2022. He submits that the trial is starting on 2 October 2023 and the overarching consideration for Mr Boulton is to preserve the trial date. Given the proximity of the trial, Mr San Diego submits that it will be inevitable that the Third Parties, once joined, will be seeking an adjournment of the trial as there is insufficient time for them to prepare for, and participate in, the trial.
[42] As to Mr and Mrs Christie’s reliance on the decision in Hall, Mr San Diego submits that that case is distinguishable from the present situation as it is apparent that in Hall the delay was short, being three or four months, and Tipping J stated that the delay did not give him “any great concern”.11 Mr San Diego submits the delay in the present case is much more significant with the new hearing date likely to be some time in 2025.
[43] As to Mr Boulton being complicit, Mr San Diego submits receiving notice of the potential for Mr and Mrs Christie to join the Third Parties does not make Mr Boulton complicit. Further, he contends making enquiries whether Mr and Mrs
10 Hall v Hall HC Christchurch M516/89, 16 April 1991.
11 Above, n 10, at 4.
Christie have prepared and served third party notices is not complicity. He submits that Mr Boulton is not complicit with Mr and Mrs Christie to join the Third Parties, and has not given consent to join them. He further submits that the joint memorandum dated 26 May 2023 is not evidence of complicity from Mr Boulton and that any submissions arising from the joint memorandum are irrelevant.
[44] Mr San Diego submits, in summary, that the prejudice to Mr Boulton by a delay of the trial is very significant and granting leave to Mr and Mrs Christie to join the Third Parties when the delay is of their own making is not justified. Accordingly, Mr Boulton should not be prejudiced by the delay of the trial by such a significant amount.
Result
[45] I am of the view that leave should be granted to Mr and Mrs Christie to join the Third Parties. The reasons for this view are as follows:
(a)The most important factor is that the overall interests of justice must prevail, as stated in the KPMG Peat Marwick decision. Here it is apparent from the evidence the high degree of reliance Mr and Mrs Christie placed on the professionals who are the Third Parties, and the Council in respect of the issue of the CCC, in the construction of their house. The claims against the Third Parties are substantially the same as Mr Boulton’s claims against Mr and Mrs Christie and it is therefore appropriate that all of these issues are dealt with in the one trial.
(b)Given the close correlation between Mr Boulton’s claims against Mr and Mrs Christie, and Mr and Mrs Christie’s claims against the Third Parties, the risk of different findings in different trials is, in my view, an unacceptable one — all claims should be dealt with in the one trial.
(c)Mr and Mrs Christie could have joined the Third Parties as of right if they had done so in a timely fashion and this weighs in favour of granting leave.
(d)The delay of the trial is regrettable, particularly given its likely length, but in my view it is overridden by the interests of justice in having all claims relating to the Defects dealt with in the one trial.
The delays by Mr and Mrs Christie have been explained, although the delay from February to July 2023 was unfortunate.
Orders
[46] In reaching the conclusion set out at [45], I have not placed much significance on the arguments advanced by Mr Biddle of the complicity of Mr Boulton in the joining of the Third Parties, or the argument that the Court should enforce a prior agreement with Mr Boulton based on the Hall v Hall decision. As noted at [45](a), the overriding issue is that the interests of justice are served which in my view requires Mr Boulton’s claims against Mr and Mrs Christie, and Mr and Mrs Christie’s claims against the Third Parties to be heard in one trial.
Orders
[47] In granting leave to Mr and Mrs Christie to join the Third Parties, in my view, it is preferable to adopt the alternative set out at [7](b) of granting leave to Mr and Mrs Christie to issue third party notices against the Third Parties under r 4.4(2)(b), rather than extend the time to validate the existing service of third party notices on the Third Parties under r1.19 as proposed in [7](a). I make the order below accordingly.
Orders
[48]I make the following orders:
(a)Mr and Mrs Christie are granted leave in accordance with r 4.4(2)(b) of the High Court Rules 2016 to issue third party notices to the Third Parties.
(b)Counsel are directed to endeavour to agree costs. Failing agreement, within 20 working days of the date of this judgment, counsel for Mr and Mrs Christie will file a memorandum as to costs (not exceeding five pages) within 10 working days of expiry of the 20 working day period, and counsel for Mr Boulton will file a reply (not exceeding five pages) within 5 working days of receipt of counsel for Mr and Mrs Christie’s memorandum. A decision as to costs will then be made on the papers.
…………………………….. Associate Judge Taylor
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