Dobbe v Taylor
[2023] NZHC 2122
•9 August 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-1978
[2023] NZHC 2122
BETWEEN RAYMOND HENRY DOBBE and CHD TRUSTEES (DOBBE) LIMITED, as
trustees of the EMW TRUST Plaintiffs
AND
DOUGLAS OWEN TAYLOR
First Defendant
DTB CONSTRUCTION LIMITED
Second DefendantAUCKLAND COUNCIL
Fifth Defendant
Hearing: 31 July 2023 (by AVL) Appearances:
S E Russell for Plaintiffs
A J B Holmes for First and Second Defendants
Judgment:
9 August 2023
JUDGMENT OF ASSOCIATE JUDGE LESTER
This Judgment was delivered by me on 9 August 2023 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date: …..
DOBBE v TAYLOR [2023] NZHC 2122 [9 August 2023]
Introduction
[1] This proceeding concerns a container storage facility and warehouse built by DTB Construction Limited (DTB) for the plaintiffs at 26 Jomac Place, Auckland. One of the plaintiffs, Mr Dobbe, dealt with Mr Taylor (the first defendant) who is also the director of DTB, and through another company with his wife, the shareholder of DTB.
[2] The essence of the plaintiffs’ claim is that the new storage facility which the plaintiffs say was designed and built by DTB had to be strong enough to withstand loads from fully loaded containers stacked three to four containers high, along with the equipment necessary to move and stack those containers - being heavy hoist lifts.
[3] The plaintiffs say the surface built by DTB has failed completely and had to be replaced.
[4] Mr Dobbe fronted the negotiations on behalf of the plaintiff trust, the EMW Trust (the Trust). Mr Dobbe says he has no expertise in construction and relied on assurances from Mr Taylor that DTB could deliver a yard capable of dealing with the heavy loads involved. Mr Dobbe says Mr Taylor assured him that he would personally supervise the works; hence one of the causes of action being that Mr Taylor personally assumed a duty of care in relation to the construction.
[5] DTB and Mr Taylor seek further particulars of the statement of claim. Their application first came before me in April 2023 when the then current statement of claim was the third amended statement of claim. That claim was 185 paragraphs long and contained six causes of action together with schedules of defects.
[6] When that matter came before me in April 2023, there were discussions as to the form of the proceeding and some of the issues that I saw with the way the statement of claim was framed. As recorded in a Minute issued after the hearing, rather than determine the applications, the hearing became in effect an issues conference.
[7] As a result of those discussions, a fourth amended statement of claim was filed on 19 May 2022.
[8] While Mr Holmes, counsel for DTB and Mr Taylor, accept the fourth amended statement of claim is an improvement, nonetheless an amended application for particulars has been filed along with an application to strike out two of the six causes of action on limitation grounds.
The application for particulars
[9]Rule 5.26 of the High Court Rules 2016 provides:
Statement of claim to show nature of claim
The statement of claim—
(a)must show the general nature of the plaintiff’s claim to the relief sought; and
(b)must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff’s cause of action; and
(c)must state specifically the basis of any claim for interest and the rate at which interest is claimed; and
(d)in a proceeding against the Crown that is instituted against the Attorney-General, must give particulars of the government department or officer or employee of the Crown concerned.
[10]The Court of Appeal in Price Waterhouse v Fortex Group Ltd said:1
… the Court and opposite parties are entitled to be advised of the essential basis of a claim or defence, and all necessary ingredients of it, so that subsequent processes and the trial itself can be conducted against recognisable boundaries. Neither the court nor opposite parties should be placed in the position of having to deal with a proposition of whose substance adequate notice has not been given in the pleadings’.
[11]The Court put the scope of the requirement in this way:2
The pleader and the court must simply ask “in the circumstances of this claim, is that statement sufficiently detailed to state a clear issue and inform the opposite party of the case to be met?”. This is not, under modern practice, simply some minimum which a Defendant needs so as to be able to plead. It is intended to supply an outline of the case advanced, sufficient to enable
1 Price Waterhouse v Fortex Group Ltd CA179/98, 30 November 1998 at 18.
2 At 19.
a reasonable degree of pre-trial briefing and preparation. Discovery and interrogatories are only an adjunct, not a substitute for pleading.
[12] In Re Securitibank Ltd (No. 25), Barker J summarised the general purpose and content of particulars in the following way:3
The function of particulars is to carry into operation the over-riding principle that the litigation between the parties, and particularly the trial, should be conducted fairly, openly, without surprises and incidentally, to reduce cost. Their function has been stated inter alia:
(a)to inform the other party of the nature of the case he has to meet, as distinguished from the mode in which the case will be proved;
(b)to prevent the other party from being taken by surprise;
(c)to enable the other party to know what evidence he ought to be prepared; and
(d)to limit and define the issues.
A certain amount of detail is necessary in order to ensure clearness. What particulars need to be stated depend on the facts of each case.
[13] The exchange of briefs does not alter the requirement for properly particularised pleadings. Kós J (as he then was) in Ayers v LexisNexis NZ Ltd stated:4
Particulars lie in a sometimes uncomfortable no-mans-land between material or essential facts (which must be pleaded and traversed) and evidence (which must not). As Drummond J put it in Queensland v Pioneer Concrete (Qld) Pty Ltd:
… a pleading must contain only a statement in summary form of the material facts, but not the evidence by which those facts are to be proved, while the primary function of particulars is to ensure that effect is given to the overriding principle that the litigation between the parties, particularly the trial, should be conducted fairly, openly and without surprises and incidentally to reduce costs.
[14] In considering whether a party is likely to be taken by surprise, the court is entitled to have regard to whether the particulars are within the knowledge or control of the requesting party and the fact that briefs of evidence will be exchanged well in advance of the hearing:5
3 Re Securitibank Ltd (No. 25) HC Auckland A355-81, 10 October 1983.
4 Ayers v LexisNexis NZ Ltd [2012] NZHC 3055 at [49].
5 Body Corporate 74246 v QBE Insurance (International)Ltd [2015] NZHC 1360 at [18].
The Court is also entitled to take into account its ability in cases with substantial evidence to provide for defendants to have extended periods of time to digest and respond to the evidence of the plaintiff.
[15] Pleadings should be read as conveying what they would reasonably convey, in the context of the case: “to a sensible legal mind”.6
[The detail in a statement of claim] is not at the level of a full disclosure of all evidence and documentation. It is of course an abbreviated summary “statement” of the basic facts said to give rise to the claim, and the relief which is sought.
[16] It is the level at which such abbreviation is to be set which causes ongoing difficulties:7
As so often is the case in procedural matters, in the end a common-sense and balanced judgment based on experience as to how cases are prepared and trials work is required. It is not an area for mechanical approaches or pedantry.
[17] Mr Holmes prepared a schedule of the particulars sought which set out the paragraph from the fourth amended statement of claim as pleaded, and the particulars requested. My ruling in respect of each of those particulars is contained in the accompanying schedule in the third column.
[18] During submissions, Mr Russell accepted a need to amend some aspects of the pleading, that acknowledgement is reflected in the schedule.
The strike out applications
The Fair Trading Act 1986 cause of action
[19] The fifth cause of action alleges a breach of the Fair Trading Act 1986. It is brought against both DTB and Mr Taylor.
[20] Under s 43A of the Fair Trading Act, there is a limitation period of three years from the date on which loss or damage, or the likelihood of loss or damage, was discovered or ought to have been discovered.
6 Price Waterhouse v Fortex Group Ltd, above n 1 at 18.
7 At 19.
[21] Mr Holmes, counsel for the applicants submits that the Fair Trading Act cause of action was included in the first statement of claim filed 21 September 2021 and so will be statute barred if the loss or damage was discovered, or ought to have been discovered, prior to 21 September 2018 (the date three years prior).
[22] Referring to Commerce Commission v Carter Holt Harvey, Mr Holmes made the following points.8
[27] In short, time starts running when the applicant discovers or ought to have discovered that loss or damage has already occurred, or is likely to occur in the future. If relief is sought for loss or harm already suffered, then time will start running from discovery (actual or constructive) of that fact …
[29] For present purposes, the concept of discovery entails finding something out, in the sense of becoming aware of it. An applicant discovers the loss or damage when he or she acquires knowledge of it. In the Court of Appeal there was some discussion about the “extent” of knowledge required. Extent in this context is not concerned with the quality of the necessary knowledge. Rather it is concerned with the subject matter of that knowledge. Is that subject matter the certainty of loss or damage, the possibility of its having occurred, or some intermediate position? It is neither necessary nor desirable to attempt some qualitative description of the knowledge inherent in the concept of discovery. Put simply, an applicant either is or is not aware of the loss or damage. Furthermore, if there is any doubt about whether the applicant was actually aware of the loss or damage, the enquiry then moves to whether the applicant ought reasonably to have been aware of it. The Court will then have to consider whether a reasonable person, situated as the applicant was, ought to have known that loss had occurred. No further refinement is required on either of these aspects of the matter.
Threshold for strike out
[23] Mr Russell, counsel for the plaintiffs, emphasised that the onus is on the defendants to show that the plaintiffs’ claim, or at least some part of it, is statute barred. “If the Plaintiff in opposition to the defendants’ proposition can show that it has a fair argument that the claim is not statute barred … then of course the matter must go to trial.”9
[24] Mr Russell relied on the following passage also from Commerce Commission v Carter Holt Harvey:10
8 Commerce Commission v Carter Holt Harvey [2009] NZSC 120, [2010] 1 NZLR 379.
9 Matai Industries v Jensen [1989] 1 NZLR 525 (HC) at 12.
10 Commerce Commission v Carter Holt Harvey, above n 8 at [39].
There must be no reasonable possibility that the [proceeding] was brought within time. If there is, the matter must go to trial, with the limitation point being a defence to be assessed on the basis of all the evidence led at trial.
Is the evidence sufficiently clear to warrant strike out?
[25] Mr Holmes’ submissions focused on an emailed letter dated 2 August 2018 which Mr Dobbe copied to Mr Taylor. The letter was in fact from Mr Dobbe’s company, World Moving Storage Limited, which was the tenant at the yard owned by the plaintiff trust (the EMW Trust). The letter was intended to be formal notice from the tenant company to the EMW Trust landlord. It stated:
We would like to formally raise the following matters that we require the EMW Trust to resolve as quickly as is practical.
[26]The second point of the letter being:
2)There has been serious degradation of the outside concrete operating area that requires urgent attention. We require the landlord to acknowledge the area concerned is not up to the standard required and that the contractors will undertake repairs to restore this area to the standard required to operate the vehicles and heavy machinery used by the company.
[27]The letter then went on to say:
It is unreasonable to expect World Moving and Storage to cover the costs of the maintenance and repair of the concrete courtyard area as we could reasonably expect the surface to last more than the 12 months it has.
[28] Mr Holmes submits that the evidence shows Mr Dobbe was aware of the damage or ought reasonably to have been aware.11
[29] Mr Russell in reply, relied on an exchange of emails which Mr Dobbe was copied in on involving GWE Engineering Limited (GWE) concerning the breakup of the concrete. The exchange of emails was in July 2019. The state of the concrete had worsened.
11 Mr Holmes relied on two prior letters from Mr Dobbe to Mr Taylor with a list of remedial work on site including concrete cracks in drive and concrete cracking in the yard. However, the reference in these letters to cracking is in the nature of items under a defects liability period. Mr Holmes also relied on reference in earlier versions of the statement that the damage when first seen was serious. Those claims have been deleted. Superseded pleadings are not evidence.
[30] In an email dated 15 July 2019, GWE referred to a prior email (the prior email) which from context was from GWE to Mr Dobbe, or at least again Mr Dobbe was copied in on that prior email. The prior email is not dated. At one point the prior email records:
As we discussed. Raymond [Mr Dobbe] has real concerns regarding the rapid degradation of the y ard in particular the main ar ea of the slabs where the concrete around the drains have suck and are breaking up. Also the issues of concrete breaking on the edges of the slabs and large cracks appearing across the concrete slabs.
We are trying to determine if this is reasonable wear and tear or in there construcon issues. (reproduced with errors as per original)
[31] Mr Russell’s point was that if engineers could not determine whether the concrete degradation was reasonable wear and tear or construction issues then it is not reasonable to treat Mr Dobbe as having actual knowledge of the defects at an earlier date or to say he ought to have been aware of those defects. It is unhelpful that the Court was not told the date of the previous email. However, if the degradation in the concrete was reasonable wear and tear, such is not claimable loss or damage as it is a natural characteristic of the constructed surface. However, the email ends:
Overall there should not be this level of degradaon in a y ard this new and ond that was supposed to be engineered to cope with the acrity. The subsidence points to issues with the design and the preparation and c ompacon of the sub base in the yard. This being said the building has a code of compliance which means there has been Engineer sign off so it would be helpful to find out who the engineers were and get their report. (reproduced with errors as per original)
[32] Accordingly, the prior email from GWE is somewhat equivocal, albeit the conclusion leans against the concrete failure being a wear and tear issue. However, there is no evidence that this email pre-dates the three year cut off prior to the claim being issued on 21 September 2021.
[33] On the material I have, I cannot determine when a reasonable person in the position of Mr Dobbe ought to have known that loss had occurred as opposed to the damage to the surface he was seeing as being fair wear and tear. Mr Russell noted the reference in the 2 August 2018 letter to “maintenance and repair”; his point being this reference suggests the damage was seen as fair wear and tear. As far as I can tell, a year later GWE are somewhat equivocal on the issue albeit, as I have said, leaning
towards the degradation being beyond what could be expected of a new yard. There is a continuum from the cracking to be expected in a new concrete slab through fair wear and tear, to damage that ought to alert a plaintiff that the slab has defects. I cannot, on the material I have, fix when the last point occurred. I accept Mr Russell’s submission that there is a reasonable possibility the Fair Trading Act cause of action was brought within time.
[34] Accordingly, the application to strike out the Fair Trading Act cause of action is dismissed.
Application to strike out pre-contractual misrepresentation claim
[35] The sixth cause of action against DTB was first introduced into the proceeding on 31 May 2022 when it appeared in the second amended statement of claim. The plaintiffs seek relief under s 35 of the Contract and Commercial Law Act 2017 on the basis there were pre-contractual misrepresentations which induced the plaintiffs to enter into the contract.
[36] The Limitation Act 2010 provides for a two-stage assessment, with a primary period of limitation which can potentially be extended if there is delayed knowledge. Under s 11 of the Limitation Act, the pre-contractual misrepresentation claim is statute barred if the act or omission on which the claim is based (the claimant’s primary period) occurred before 31 May 2016, being six years before the pre-contractual misrepresentation cause of action was introduced on 31 May 2022.
[37] Given the written contract in issue in this proceeding is dated 1 June 2016 and as discussed in the claim for particulars, an earlier oral agreement is also relied on, it is clear the plaintiffs need to rely on late knowledge.
[38] Mr Russell accepted that the applicable limitation period is three years from the date on which the plaintiffs “gained late knowledge” or ought reasonably to have gained knowledge of the relevant facts.
[39] Mr Holmes, in submitting late knowledge was not available, relied on the August 2018 email referred to at [25]-[27] above. For the same reasons given in
relation to the Fair Trading Act cause of action, I cannot dismiss there is a reasonable possibility that the plaintiffs’ claim is brought within time, that is, I have not been persuaded that Mr Dobbe ought to have been aware of the damage (as opposed to wear and tear) prior to 31 May 2019, that being three years before the first pleading of this cause of action.
[40]Accordingly, this aspect of the defendants’ strike out application is also
dismissed.
Costs
[41] The parties have had shared success. If no costs submissions are filed within 10 working days (not more than five pages) then there will be no order as to costs. If a party seeks costs then reply submissions are to be filed within a further 10 working days (not more than five pages).
Associate Judge Lester
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