Chow v Thomson - [2012] NZHC 712

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2009-404-4765 [2012] NZHC 712

BETWEEN LAP HANG CHOW AND LAP LEE CHOW
Plaintiffs

ANDRAYMOND JOHN THOMSON AND VANESSA LOUISE THOMSON
First Defendants

ANDFRANKLIN DISTRICT COUNCIL Second Defendant

ANDCARNACHAN ARCHITECTS LIMITED Third Defendant

ANDGOOD BROS. CONSTRUCTION LIMITED
Fourth Defendant

ANDM.P.M WATERPROOFING LIMITED (IN LIQUIDATION)
Fifth Defendant (discontinued)

ANDGENERAL MANUKAU ENTERPRISES LIMITED (IN LIQUIDATION)
Sixth Defendant

ANDWHENUAPAI JOINERY (1998) LIMITED Seventh Defendant

ANDR & B PLASTERING LIMITED Eighth Defendant

ANDCAPET HOLDINGS LIMITED First Third Party

ANDP R HEALEY Second Third Party

ANDIAG NEW ZEALAND LIMITED Third Third Party

Hearing: 1 March 2012

CHOW V THOMSON HC AK CIV 2009-404-4765 [15 March 2012]

Appearances: S A Thodey for Second Defendant
M Mitchell for Third Third Party

Judgment: 15 March 2012

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 15 March 2012 at 4:30 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date: ...................................

Solicitors:
Heaney & Co, Auckland – email: sat@heaneyco.com

Fortune Manning, Auckland – email: myriam.mitchell@fortunemanning.co.nz

ANDM.P.M WATERPROOFING LIMITED (IN LIQUIDATION)
Fifth Defendant (discontinued)

ANDGENERAL MANUKAU ENTERPRISES LIMITED (IN LIQUIDATION)
Sixth Defendant

ANDWHENUAPAI JOINERY (1998) LIMITED Seventh Defendant

ANDR & B PLASTERING LIMITED Eighth Defendant

ANDCAPET HOLDINGS LIMITED First Third Party

ANDP R HEALEY Second Third Party

ANDIAG NEW ZEALAND LIMITED Third Third Party

Introduction

[1] The applicant, being the second defendant and now Auckland Council

(“Council”), seeks review of a decision of an Associate Judge in chambers.1

[2] The Associate Judge declined to grant the Council leave to commence a proceeding against IAG New Zealand Limited (“IAG”), in the latter’s capacity as insurer of the fourth defendant, Good Bros Construction Limited (“Good Bros”).2

[3] The Associate Judge declined the Council’s application because he did not consider that the Council had satisfied the relevant criteria. In particular, the Associate Judge was not satisfied that Good Bros was not a “perfectly good common law defendant”.

[4] Quite independently of the application for review, the Council seeks leave to commence another proceeding against IAG, but this time in IAG’s capacity as insurer of the sixth defendant, General Manukau Enterprises Limited (in liquidation) (“GME”). This application for leave was before the Associate Judge but was overlooked. The trial of the plaintiffs’ claim is to be held over 10 days, commencing on 30 April 2012 and the parties wish me to determine this second application for leave contemporaneously, rather than refer it back to the Associate Judge.

Background

[5] This is a leaky building claim. The plaintiffs are the owners of a residential property in South Auckland. The house was completed in about 2001. The plaintiffs acquired the house from the first defendants in 2005 and the plaintiffs sue them in contract. Repairs to the property have almost been completed. In round terms, and subject to issues as to betterment, the cost of those repairs is about $2.3 million.

[6] The second to eighth defendants comprise the parties involved in the construction work. The plaintiffs have discontinued against…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Chow v Thomson

Details

AGLC: Chow v Thomson [2012] NZHC 712
Case: [2012] NZHC 712
Decision Date: 15 March 2012

CaseChat Overview and Summary

The High Court of New Zealand Auckland Registry considered the case of Chow v Thomson. The plaintiffs, Lap Hang Chow and Lap Lee Chow, filed a leaky building claim against various defendants involved in the construction of their residential property. The Auckland Council (formerly Franklin District Council) sought leave to directly proceed against IAG New Zealand Limited, the insurer of two of the defendants, Good Bros Construction Limited and General Manukau Enterprises Limited, in their respective capacities as insurers. The Associate Judge had previously declined the Council’s application, finding that the defendants were "perfectly good common law defendants."

The Council argued that Good Bros was not defending the claims vigorously and had not pursued IAG for its discovery, suggesting that it might not be able to meet any judgment against it. The court noted that Good Bros had instructed solicitors and counsel, opposed the plaintiffs' claim, issued cross claims, and taken steps to pass any judgment onto its insurer. However, the Council's evidence of Good Bros' limited brief of evidence and failure to pursue IAG for its discovery led the court to doubt that Good Bros remained a perfectly good common law defendant. The court granted the application for review regarding Good Bros.

Regarding General Manukau Enterprises Limited, IAG argued that GME's breaches of policy conditions prejudiced its ability to defend the claim and that the long stop provisions might preclude a claim against a third party. The court found that these matters were to be argued in the main proceedings and could not be resolved on an interlocutory basis. Given the narrow margin and the possibility that IAG's position might not have improved even with an earlier application, the court granted the Council leave to proceed against IAG in respect of GME.

The court granted the Council's application to review the Associate Judge's decision and ordered the Council to file its proceedings and IAG to file its statements of defence by a specified date. Costs on the application were reserved pending the determination of the proceedings.

Orders