Fifer Residential Limited v Knight Coldicutt HC Auckland CIV 2005-404-2299

[2007] NZHC 2050

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2005-404-2299

BETWEEN  FIFER RESIDENTIAL LIMITED Plaintiff

ANDKNIGHT COLDICUTT Defendant

Hearing:         31 July 2007

Appearances: B Keene QC for Plaintiff

M Ring QC and P Fee for Defendant

Judgment:      27 August 2007 at 4.30 pm

In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 4.30 pm on the 27th day of August 2007.

JUDGMENT OF ASSOCIATE JUDGE D I GENDALL

Introduction

[1]      Two applications are before the Court:

a)        an application by the defendant to strike out the plaintiff’s statement of claim; and

b)an informal application from the plaintiff for leave to file a second amended statement of claim under Rule 187 of the High Court Rules.

[2]      In each case the applications are opposed.

[3]      Briefly,  this  proceeding  involves  allegations  that  the  defendant  Knight

Coldicutt (“KC”), a firm of solicitors acting for a property developer, were negligent

FIFER RESIDENTIAL LIMITED V KNIGHT COLDICUTT HC AK CIV 2005-404-2299  27 August 2007

and in breach of their retainer in relation to work they did in connection with the development.  The plaintiff (“Fifer”) says it has suffered loss as a result.  The strike out application is argued on the basis that the causes of action are statute barred by the Limitation Act 1950.

[4]      In  an attempt to answer the limitations defence raised  by KC,  Fifer  has sought leave to file amended pleadings.  Those proposed amended pleadings contain additional detail about the nature of the obligations owed by KC to Fifer and steps KC could (and should) have taken in order to prevent the loss suffered by Fifer.  KC argues that the proposed amended pleadings contain fresh causes of action and so are statute barred in their own turn.

[5]      The current statement of claim was first filed in May 2005 and then amended in June 2005.  The relevant deadline under s 4 of the Limitation Act is therefore May

1999.  If the causes of action accrued before this date then they are statute barred.

[6]      Leave to file the proposed amended pleadings was sought in August 2007.  If KC is right, and the proposed amended pleadings allege fresh causes of action, then the relevant deadline is August 2001 and any cause of action accruing before this date is statute barred.  If the proposed amended pleadings do not allege fresh causes of action then the relevant deadline is the same date as for the current statement of claim: May 1999.

[7]      It will be necessary to consider both sets of pleadings separately.  I turn now to the background facts in this matter.  The following discussion of the background is drawn from the current statement of claim.  I will first consider the submissions put to me in relation to that statement of claim and then turn to consider whether the proposed amended pleadings are able to answer those concerns.

Background

[8]      This  proceeding  arises  out  of  the  development  of  a  unit  title  residential apartment building – Gladstone Apartments (“the Development”) – in Parnell between 1995 and 2000 by Parkbrook Holdings Ltd (“Parkbrook”) as developer.

[9]      As I have noted, KC is a firm of solicitors that acted for Parkbrook, the developer, in relation to the Development.

[10]   Parkbrook is now in receivership and liquidation.   The plaintiff in this proceeding, Fifer, is said to have been involved with Parkbrook in the development of Gladstone Apartments.  For the purposes of the present strike-out application it is accepted that Parkbrook’s rights in respect of the development, including any rights of action against KC, were assigned to Fifer.

[11]     It was in December 1995 that Parkbrook instructed KC to act as its solicitors on all aspects of the Development.   At the time KC was initially instructed, the Development was to comprise nine floors above ground and three below.   On 8

March 1996 Parkbrook applied to the Auckland City Council for a resource consent. This application was adjourned in November 1996 when it became apparent that the planned  development  exceeded  relevant  height  restrictions.    In  December  1996

Parkbrook made an amended application for a building with seven floors above ground and three below.  That was then further amended in March 1997 to six floors above ground and three below.

[12]     In its pleading, Fifer says Parkbrook’s intention from March 1997 was to first obtain resource consent for six floors above ground.   Once that was obtained, Parkbrook would apply for consent to add a seventh floor.

[13]     From March 1997 Parkbrook began marketing units in the Development off the plans.   In order to ensure its ability to construct a seventh floor, Parkbrook instructed KC to take steps to preserve its rights in this respect.  At paragraph 22 of its amended statement of claim (dated June 2005), the plaintiff pleads:

[KC] were instructed to undertake all legal steps necessary to ensure that owners of the units:

(a)      could not object if the Development comprised only six floors;

(b)could not object if an apartment purchased on the planned seventh, sixth or fifth floor was “dropped” by one floor;

(c)were bound to take all steps necessary to ensure the construction of a seventh floor of the Development after completion of the six floors; and

(d)were bound to take all steps necessary to ensure the sub-division of Unit B3 [the basement unit] and the subsequent sale of sub-divided carparks took place.

[14]     In accordance with those instructions, in April 1997 KC drafted a standard agreement for sale and purchase of the units in the Development (“the ASP”).   A number  of  clauses  in  the  ASP  were  apparently  intended  to  have  the  effect  of reserving to Parkbrook the right to develop the seventh floor.   In the event, those clauses did not achieve that end.

[15]     On 15 May 1997 the Council granted resource consent for a building with six floors above ground and three below.  In June 1997 Parkbrook began selling units in the development on the basis of the ASP prepared by KC.

[16]     On 14 September 1998 Parkbrook applied for resource  consent to add a seventh floor to the Development.  That application was declined on 11 August 1999 and Parkbrook appealed on 3 September 1999.

[17]     On  14  April  2000  KC  filed  amended  body  corporate  rules  for  the Development.  As was the case with the ASP, clauses in those rules were intended to reserve  to  Parkbrook  the  right  to  develop  the  seventh  floor.    Specifically,  the amended rules contained clauses obliging the Body Corporate to permit the proprietors of the units on the sixth floor (6B and 6C) to develop the airspace above their units.   In conjunction with those amended rules, the sale and purchase agreements for units 6B and 6C purported to enable Parkbrook to exercise those airspace development rights on behalf of the purchasers.   The agreements also required the purchasers of units 6B and 6C to execute powers of attorney in favour of Parkbrook enabling Parkbrook to exercise the development rights.   Finally, the agreements required the purchasers, in the event the units were on-sold, to covenant with the subsequent purchaser in order to ensure the perpetuation of Parkbrook’s rights.

[18]     On 20 April 2000, certificates of title for the units in the Development were issued.  On 9 May 2000 settlement of the sale of various units took place.  Prior to this, on 2 May 2000, KC had sent a letter to all the purchasers of units in the

Development stating that the Development now only comprised six floors and not seven.

[19]     Between May 2000 and April 2004 45 units in the Development were on-sold to subsequent purchasers under sale and purchase agreements that, it is said, did not contain any provisions to protect Parkbrook’s rights to develop the seventh floor. These 45 units constituted more than 20% of the units in the Development.   In addition, they comprised more than 20% of the total unit entitlements for the Development.  The significance of the 20% figure is that s 42 of the Unit Titles Act

1972 permits an action that would otherwise require unanimity to be carried out by

Court order on the consent of 80% of those entitled to vote.  Therefore, once over

20% of the unit entitlements had passed out of Parkbrook’s control, its ability to effect changes to the unit plan was seriously compromised.

[20]     On 4 January 2001 the Environment Court allowed Parkbrook’s appeal and granted resource consent allowing the addition of the seventh floor.

[21]     In parallel with these events, Fifer obtained various rights in respect of the Development by assignment from Parkbrook.  In June 2000 Parkbrook assigned to Fifer its rights as developer and vendor of the units in the Development, including its rights  to  benefit  from  the  outcome  of  any  appeal  to  the  Environment  Court. Parkbrook was then put into receivership and liquidation between October 2002 and March 2003.

[22]     At some point it became evident to Fifer that the proprietors of the units in the Development would not consent to Fifer moving ahead with the development of the seventh floor.   Accordingly, in April 2003 Fifer executed memoranda of encumbrance and placed caveats on the titles of those units that had not been on-sold to subsequent purchasers.   On 24 December 2004, Fifer also took the step of obtaining from Parkbrook any rights of action against KC in the following terms:

…Parkbrook assigns and transfers to Fifer all rights and claims of any nature it may have against Knight Coldicutt and its past, present or future partners arising from the legal work Knight Coldicutt undertook for Parkbrook relating directly or indirectly to the Development.

The judgments in Gieseg and Kline

[23]     The  construction  of  the  apartment  building  comprising  the  Development began in May 1999 and was completed in April 2000.  I say ‘completed’ in that the building work appeared to be finished, and a certificate of practical completion was issued, albeit that the building contained only six floors above ground and not seven. The seventh floor was not included in the initial construction work as the resource consent was not obtained from the Environment Court until January 2001.   Fifer took the view that the building was not complete as of April 2000, as the complete Development contemplated seven floors.

[24]     Proprietors of the sold units having objected to Fifer developing the seventh floor of the Development, Fifer applied to the High Court for declarations, arguing that the parties to the ASP were contractually bound to facilitate the seventh floor development and that all proprietors were required under the body corporate rules to permit Fifer to proceed with the Development.

[25]     Rodney Hansen J heard this application and delivered a joint judgment in Fifer Residential Ltd v Gieseg HC AK CIV 2004-404-2189 and Fifer Residential v Kline  HC  AK  CIV  2004-404-6073  on  15  June  2005.    He  dismissed  Fifer’s application for declarations.  It is important to understand the basis upon which he did so, as his reasoning provides a framework for the consideration of the causes of action in the present case.   KC’s essential contention is that the judgment demonstrates that Parkbrook  (and therefore Fifer) lost  the  rights  to  develop  the seventh floor well before May 1999.  KC maintains that this is the date on which the causes of action accrued and accordingly the causes of action are statute barred.

[26]     The issues identified by Rodney Hansen J in his decision were:

a)Whether   the   ASP   permitted   Fifer   to   carry   out   the   proposed development and obliged the purchasers to facilitate the work.

b)Whether, under the Unit Titles Act 1972, the consent of all unit title holders to the development was required.

c)        Whether unit title holders were bound to consent to the development under the body corporate rules.

The ASP

[27]     Fifer argued that clauses in the ASP bound purchasers of the units to facilitate completion of the seventh floor development.   It relied particularly on clause 8.6, which reserved to Parkbrook the right to accept, grant or receive the benefit or restriction  of  any  instrument  required  in  order  to  satisfy  the  conditions  of  any consent, or that were considered desirable by Parkbrook in respect of the “land, building or development”. ‘Development’ and ‘building’ were defined terms in the ASP.    ‘Development’  referred  to  the  construction,  potentially  in  stages,  of  the

‘building’ in accordance with the plans and specifications.  ‘Building’ referred to the building to be erected on the land in accordance with the plans and specifications. The plans and specifications were those annexed to the ASP, which included the seventh floor.  Fifer therefore argued that the ASP bound purchasers to facilitate the completion of the seventh floor as a part of the ‘building’ and ‘development’.

[28]     Fifer also referred to clause 15.1 of the ASP, which required the purchaser to execute a Power of Attorney in favour of Parkbrook for the purposes of completing the ‘development’, exercising the purchaser’s voting rights under the body corporate rules, and approving and depositing any redevelopment plan under the Unit Titles Act.

[29]     Counsel for Fifer acknowledged the substantial lapse of time between the completion of the first six floors and the proposed development of the seventh floor. He  pointed  to  the  provision  in  the  definition  of  ‘development’  permitting  the building to be constructed in stages.   Fifer’s argument was that they were now seeking to complete the Development by adding the final stage.

[30]     These arguments all rested on the Judge  accepting that  the  definition  of

‘development’  in  the  ASP  referred  to  the  seven  above  ground  floor  building proposed on the plans rather than the six above ground floor building that was actually constructed.   Rodney Hansen J took the view that the ‘development’ as

defined in the ASP comprised the building that was actually constructed.  This was not a staged development.  The terms of the building contract made it clear that the development was for a six level building, with provision for a further level only if notice was given within three months of commencement of construction.  That did not occur.   It therefore followed that Fifer could not compel purchasers under the ASP to facilitate the development of a seventh floor.

[31]     In reaching that conclusion, the Judge emphasised that the essential question before him was not one of interpretation.  Rather it was one of fact – what was done pursuant to the ASP and as contemplated by it.  What was done was to build a six level apartment building.  That was the ‘development’.  The rights and obligations of the parties under the ASP took effect accordingly.

Redevelopment under the Unit Titles Act

[32]     The proposed seventh floor development was to construct a single penthouse apartment occupying the airspace within the boundaries of units 6B and 6C on the sixth level.  As the unit plan had already been deposited, the development therefore contemplated the creation of an additional unit title in respect of the seventh floor as well as the subdivision of units 6B and 6C.

[33]     The   question   for   the   Court   was   whether   those   steps   constituted   a redevelopment under s 44 Unit Titles Act, in which case it would require the unanimous consent of all the unit titleholders, or 80% if relief could be obtained under  s  42  of  the  Act.     Fifer’s  argument  was  that  it  did  not  constitute  a redevelopment and therefore only the consent of the proprietors of units 6B and 6C were needed to effect the seventh floor development.

[34]     The Judge disagreed and held that the proposed seventh floor development did  constitute  a  redevelopment  under  the  Act.     Accordingly,  Fifer  required unanimous consent to achieve it.

The body corporate rules

[35]     Finally, Fifer submitted that regardless of the contractual position, one of the rules of the body corporate – rule 2.2(g) – obliged all unit titleholders to vote in favour of the seventh floor development.  Rule 2.2(g) was incorporated into the rules by way of a purported amendment under s 37 of the Act, which, by subsection (2), makes the default rules in Schedules 2 and 3 of the Act applicable to each body corporate unless amended in accordance with the Act.

[36]     The Judge held that rule 2.2(g) did not achieve Fifer’s purpose for three reasons.  First, in its terms it did not contemplate the subdivision of existing units 6B and 6C and the creation of a new unit on the seventh floor.  Rather, it contemplated the development of the existing units vertically into the airspace above them. Accordingly,  rule  2.2(g)  did  not  oblige  the  unit  titleholders  to  consent  to  the proposed seventh floor development.

[37]     Secondly, the Judge held that rule 2.2(g) was ultra vires and therefore invalid. Section 37(5) permits the establishment of body corporate rules conferring powers or duties on the body corporate only where those powers or duties are incidental to the performance of powers or duties imposed on the body corporate by the Act.  Rule

2.2(g) was not incidental to any powers or duties imposed by the Act and therefore it was ultra vires section 37(5).  It was also ultra vires section 37(6), which states that no amendment to the rules shall destroy or modify any right created or implied by the Act.  One of the rights created or implied by the Act is the right to refuse consent to a redevelopment under s 44.  Insofar as rule 2.2(g) purported to contravene that right, it was invalid.

[38]     Thirdly, the rules were invalidly amended.  Pursuant to the Act, the rules of a body corporate may only be amended by unanimous resolution of the proprietors of the units.  Until the unit plan is deposited, there are no proprietors for the purposes of the Act.  In this case, the amended rules were lodged on 14 April 2000 but the unit plan was not deposited until 20 April 2000.  Accordingly, the attempt to amend the rules was ineffective, there being no proprietors or body corporate capable of effecting the amendments until six days later.

[39]     The ultimate effect of Rodney Hansen J’s judgment was that, because the proposed seventh floor development was structured in such a way that it constituted a redevelopment under the Act, Parkbrook needed the consent of the other unit proprietors in order to undertake it.  Parkbrook was unable to compel the proprietors to consent under the ASP, as the provisions of that agreement did not contemplate the proposed seventh floor development.  It was also unable to compel consent by means of the body corporate rules.   That is the process of reasoning which has resulted in Fifer’s current position.

The legal framework

[40]     Turning now to the strike out application before me, KC applies to strike out or dismiss this proceeding pursuant to r 186 and r 477 of the High Court Rules. Those rules relevantly provide:

186.  Striking out pleading

Without prejudice to the inherent jurisdiction of the Court in that regard, where a pleading–

(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading…

the Court may at any stage of the proceedings, on such terms as it thinks fit, order that the whole or any part of the pleading be struck out.

477.  Summary stay or dismissal

Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding –

(a) no reasonable cause of action is disclosed…

the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding.

[41]     So far as r 477 is concerned McGechan on Procedure at para HR477.03 states:

HR477.03 No reasonable cause of action disclosed

The jurisdiction under r 477(a) to dismiss has been treated as applying the same principles as under r 186: Marshall Futures Ltd v Marshall [1992] 1

NZLR 316; (1991) 3 PRNZ 200 at p 323; p 206.  The power to dismiss is to

be exercised sparingly, and only in clear cases, where it is beyond repair and so untenable that it could not succeed: Electricity Corp Ltd v Geotherm Energy Ltd [1992] 2 NZLR 641.

[42]     The principles of law governing applications to strike out pleadings under r 186 in particular are well settled.  Such strike out applications are to be heard on the basis that the facts alleged in the statement of claim are true.  It is well settled that before the Court may strike out proceedings the causes of action must be so clearly untenable that they could not possibly succeed: Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA) at 267. Further, the strike out jurisdiction is one to be used sparingly and only in a clear case where the Court is satisfied it has the requisite material: Electricity Corporation Ltd v Geotherm Energy Ltd [1992] 2

NZLR  641.    But,  it  is  not  to  be  precluded  by  the  application  raising  difficult questions of law which may require extensive argument: Gartside v Sheffield Young

& Ellis [1983] NZLR 37 (CA).

[43]     Williams J considered the jurisdiction of the Court in an application of this nature in his recent decision in Bennett & Ors v Waitakere City Council & Anor HC AK CIV-2005-404-007348 14 May 2007.   He summarised the approach to such applications at [6]:

The striking-out application was brought under both RR 186 and 477.  The approach to the jurisdiction to striking out a pleading under R 186(a) or a proceeding under those Rules is well-settled. All allegations in the statement of claim are assumed to be admitted or be capable of proof.  The pleading is then considered against the test of deciding whether, on material which can be properly considered, it has been shown that it is so clearly untenable in fact and law as to be incapable of success.   That test has been set by the Courts as being deliberately difficult to attain to preserve citizens’ access to Courts.  The discretion is to be exercised sparingly and in clear cases only. Pleadings or proceedings may be struck out even though such applications raise difficult questions of law requiring extensive argument provided the Court can be persuaded that the claim is unsound, the pleading cannot be amended satisfactorily and such an order will obviate the necessity for trial (Peerless Bakery Ltd v Watts [1955] NZLR 339; McKendrick Glass Manufacturing  Co  Ltd  v  Wilkinson  [1965] NZLR 717; R  Lucas  & Son (Nelson Mail) Ltd v O’Brien [1978] 2 NZLR 289; Takaro Properties Ltd v Rowling [1978] 2 NZLR 314; Gartside v Sheffield Young & Ellis [1983] NZLR 37; South Pacific Manufacturing Co Ltd v NZ Security Consultants & Investigations Ltd [1992] 2 NZLR 282).

[44]     To  these  comments  should  be  added  statements  Williams  J  made  in  a decision almost one year earlier, Twin Bright Shipping Co SA v Tauwhareparae

Farms Ltd HC GIS CIV 2003-416-1 26 May 2006.   He set out at [4]-[5] of that judgment some views on what it means to say that a striking-out application must show the claim “to be so clearly untenable in fact and law as to be incapable of success”.  This phrase, he said, “is now so well-worn as to carry little impact” (at [4]).  He then went on to put things “more bluntly” at [5], saying that “what striking- out applicants must show is that those claiming on them will undoubtedly lose if the case goes to trial”.  “A weak case or one imperfectly pleaded”, he continued, “is not enough; [the strike out applicant] must show the claimant’s loss is inevitable”.  This high test, he said at [2], reflects the need to preserve citizens’ access to Courts, a comment I have borne in mind when considering this present application.

The plaintiff Fifer’s causes of action – current statement of claim

[45]      In its current statement of claim, Fifer pleads two causes of action:

a)       Breach of the contract of retainer; and b)           Negligence.

[46]     Under the first cause of action, Fifer alleges that KC breached its retainer by failing to ensure that Parkbrook’s rights to develop the seventh floor were preserved. Fifer identifies a number of specific failures on the part of KC that flow from the findings of Rodney Hansen J in Geiseg and Kline:

a)       The ASP did not oblige purchasers of units to facilitate or permit the construction of the seventh floor;

b)The ASP did not oblige purchasers to ensure that sale and purchase agreements for the on-sale of units contained similar provisions obliging the subsequent purchaser to facilitate or permit the construction of the seventh floor.  KC took no other steps, including advising Parkbrook to lodge caveats, to ensure the preservation of Parkbrook’s rights in the event of an on-sale;

c)        The amendments to the body corporate rules were filed before the unit plan was lodged and were therefore invalid;

d)The amendments to the body corporate rules were in breach of s 37 of the Unit Titles Act and therefore void and of no effect;

e)        The  body  corporate  rules  did  not  bind  proprietors  to  permit  a redevelopment of the kind contemplated for the seventh floor;

f)        The letter sent to purchasers on 2 May 2000 did not refer to the fact that Parkbrook was intending to complete the seventh floor;

g)        KC  did  not  obtain  from  the  purchasers  the  powers  of  attorney specified in clause 15.1 of the ASP.

[47]     The second cause of action in negligence repeats the above allegations of specific failure on the part of KC.

The defendant KC’s submissions

[48]     The essence of KC’s submission before me was that the sole and effective cause of Fifer’s loss is KC’s failure with respect to the drafting of the ASP.  It was the failure to insert clauses into the ASP preserving Parkbrook’s rights to complete the seventh floor development that led ultimately and inevitably to the position that Fifer now finds itself in.  That failure occurred sufficiently long ago that all causes of action based upon it are now statute barred by the Limitation Act 1950.  None of the failures that subsequently occurred are material as the causes of action had already accrued by that point.  The subsequent failures were not causative of the loss and did not contribute to it.

[49]     The current statement of claim was first filed in May 2005 and thus, as I have earlier noted, any causes of action accruing before May 1999 are statute barred.

First cause of action

[50]     With respect to the first cause of action, alleging breach of the retainer, KC points out that a cause of action in contract accrues at the date of breach of the relevant duty.   It is not necessary for damage to occur.   Therefore if the relevant breach occurred prior to May 1999 then Fifer’s claim is statute barred.

[51]     The  ASP  was  drafted  by  KC  in  April  1997.    Parkbrook  entered  into agreements based on the ASP from June 1997 onwards.  As soon as Parkbrook did so, it lost the ability to exclusively control the seventh floor development.  From then on, it required the unanimous consent of all the proprietors or the consent of 80% in combination with a court order to effect the seventh floor development.  According to KC, and this appears not to be disputed by Fifer, by the end of October 1997

Parkbrook had sold 25% of the unit entitlements.  By this time, then, even with a court order Parkbrook was unable to effect the seventh floor development.

[52]     KC submits further that nothing that occurred subsequent to the negligent drafting of the ASP gave rise to a fresh cause of action or is material to the date on which the alleged cause of action accrued.   The ASP having failed to preserve Parkbrook’s rights, those rights could not have been retained by proper drafting and lodging of the amendments to the body corporate rules.  The letter sent in May 2000 did not affect the legal position either way.  Had KC obtained powers of attorney, those instruments would not have allowed Parkbrook to develop the seventh floor. No caveat could have been lodged over the titles, Parkbrook no longer possessing any rights to protect.  Finally, having failed in its duty to properly draft the ASP, KC had no further or continuing obligation in respect of that duty, and no ongoing duty to identify its own previous negligence: Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1978] 3 All ER 571. In short, KC’s position in bringing the present strike out application is that the sole and effective cause of Fifer’s loss is the improper drafting of the ASP. Once that occurred, the damage was done.

Second cause of action

[53]     Turning to the second cause of action in negligence, KC acknowledges that an essential element of the cause of action is actual damage.   The cause of action accrues when damage first occurs.

[54]     KC submits that here the damage occurred when Parkbrook first entered into ASPs with the unit purchasers which did not create or preserve its rights to complete the  seventh  floor  development.     Before  me,  counsel  for  KC  developed  that submission  with  a  very  detailed  and  useful  analysis  of  the  authorities,  which produced essentially two propositions.  First, the general rule in a case such as this one is that the cause of action accrues when the plaintiff acts on the negligent advice and enters into an agreement which deprives the plaintiff of rights he or she sought to obtain or retain.   As long as entering into the agreement alters the plaintiff’s position to his or her immediate financial disadvantage there will be loss or damage, even if the full extent of it is not known.  Second, the fact that the full amount of the loss is contingent on future events which may or may not occur does not postpone the accrual date as long as entering into the agreement changed the plaintiff’s financial position for the worse.

[55]     In  the  present  case,  KC  submits  that  Parkbrook  suffered  an  immediate adverse change in its financial position when it entered into the ASP as thereupon it lost valuable rights it had intended to retain.   Parkbrook commenced selling units under the ASP in June 1997.   That was the date on which the cause of action in negligence accrued.

[56]     KC concludes that both causes of action accrued well prior to May 1999 and therefore they are statute barred under the Limitation Act.

Fifer’s submissions

[57]     In  support  of  its  causes  of  action,  Fifer  submits  that  the  retainer  was  a continuing one, which required KC to take a number of steps over the period December 1995 to December 2000 and covered all legal aspects relating to the Development.  The essence of Fifer’s submission is that the erroneous drafting of the ASP was not the only operative breach committed by KC.  Even in the wake of the ASP there were a number of steps that KC was bound to take that would have preserved Parkbrook’s rights.   It is KC’s failure to subsequently undertake these steps that gave rise to the cause of action.  In Fifer’s words:

Following the signature of the first agreement for sale and purchase the defendants continuing retainer required it to carefully manage a chain of advice and conduct to ensure that rights envisaged by one set of documents were consistent with others.  In this case the resulting chain of rights ultimately failed to be effective in securing the legal outcomes sought i.e. control of the seventh floor development for the developer.  These outcomes could have been achieved consistently with the original contracts as drafted but for the defendant’s negligence and/or breach of retainer.

[58]     Fifer identifies a number of steps which KC ought to have taken, subsequent to drafting the ASP, in order to preserve Parkbrook’s rights to complete the seventh floor development.

[59]     First,  Fifer  notes  Rodney  Hansen  J’s  finding  that  the  ‘development’  as defined in the ASP referred to the building that was actually constructed, i.e. a six level building.  His reasoning relied in part on the fact that the building contract did not provide for a staged development of seven levels, but rather a six level development with provision for a further level if notice were given within three months of construction commencing.  Thus there were two steps that KC could have taken in order to preserve Parkbrook’s rights.   It could have advised Parkbrook to redefine ‘development’ in the building contract to include a seventh floor. Alternatively, at any time between May and August 1999 KC could have advised Parkbrook to give notice under the building contract for construction of the seventh floor.  Had either of these steps been taken, then the matrix of fact surrounding the ASP would have led to the conclusion that the ‘development’, as defined therein, comprised seven floors and not six.  The failure to take those steps occurred after the May 1999 watershed.

[60]     Secondly, Fifer refers to Rodney Hansen J’s conclusion that the proposed seventh floor development constituted a ‘redevelopment’ under the Unit Titles Act, requiring  unanimous  consent.    Fifer  submits  that  conclusion  could  have  been avoided if the unit plan and body corporate rules had been drafted differently.  Had the airspace above units 6B and 6C been constituted as a separate unit under the initial plan, rather than parts of the vertical elevation of units 6B and 6C, then the proposed development would not have constituted a redevelopment under the Act. The unit plan and amended rules were lodged in April 2000, well within the applicable limitation period.

[61]     Finally, Fifer says that the letter of 2 May 2000 constituted an additional breach as Rodney Hansen J relied on that as part of the matrix of fact in interpreting the term ‘development’ in the ASP.

[62]     Implicit in Fifer’s argument is the notion that KC had a duty, both contractual and tortious, to ensure the preservation of Parkbrook’s rights but that it was within KC’s discretion as to when and how it achieved this.   Therefore, notwithstanding that the ASP failed to ensure the preservation of Parkbrook’s rights, as long as that could be achieved later and by some other means, KC was still acting in compliance with its duties.  It was only at the point at which KC was no longer able to comply with its duties – the point at which the preservation of Parkbrook’s  rights  was irrevocably beyond reach – that KC was finally in breach of its obligations and the causes of action accrued.   Fifer illustrates this point by asking what would have occurred if Parkbrook had filed suit against KC immediately upon entering into the ASPs in June 1997.   KC says that Parkbrook would have been entitled so to do; however Fifer points out that, given that Parkbrook’s rights were still capable of preservation and therefore KC was still able to comply with its duties, Parkbrook would have not been able to identify an actionable breach at that point.

[63]     KC makes two points in response to this.  The first is that Fifer’s submission would require KC to have identified its own negligence in drafting the ASP, contrary to Midland Bank.  The second is that Fifer does not plead any breaches in respect of the building contract or the unit plan.  To the extent that those matters are pleaded in the proposed amended statement of claim, they constitute fresh causes of action. Therefore the applicable limitation deadline in respect of those allegations is August

2001, and thus the fresh allegations are also statute barred as they occurred before that date.

Issues

[64]     KC’s analysis of when causes of action accrue in contract and in tort is essentially  unchallenged  by  Fifer  in  its  submissions.    That  is  to  say,  Fifer’s submission accepts that a cause of action in contract accrues on breach and a cause of action in tort accrues when damage first occurs.   Fifer does not contest  the

analysis of the authorities presented by counsel for KC, which demonstrates that the cause of action in tort accrues when the plaintiff first suffers financial detriment, even though the full extent of that detriment is contingent on future events which may or may not occur.

[65]     The fundamental point in Fifer’s submission is that the continuing retainer meant that KC was obliged to take steps to preserve Parkbrook’s rights, but that KC could accomplish that end by a number of means within its discretion, through the appropriate drafting of a chain of documents.   Accordingly, KC did not actually breach its contractual and tortious duties to Parkbrook until the point at which its omissions meant Parkbrook’s rights were irrevocably lost.  Effectively, it was up to KC to take steps at some point to preserve Parkbrook’s rights and it was only when all the possible steps were exhausted that breach occurred.  The final available steps were still open to KC between May 1999 and April 2000, within the limitation deadline.

[66]     In light of Fifer’s analysis, the issues before me are as follows:

a)        Is it arguable that breach of the duties only occurred after May 1999?

b)Does this argument imply that KC was required, between June 1997 and April 2000 to identify and remedy its own negligence contrary to Midland Bank?

c)        Do the current pleadings provide a foundation for Fifer’s argument?

d)If not, do the proposed amended pleadings constitute fresh causes of action such that the limitation date is reset to August 2001 and the allegations are thus statute barred in any event?

Is it arguable that breach occurred after May 1999?

[67]     In my view, Fifer’s analysis does provide a tenable argument here for breach of the relevant contractual and tortious duties occurring after May 1999.   KC’s

argument rests on the premise that the breach of the relevant duties occurred when the ASP was improperly drafted and that its alleged omission at that point placed Parkbrook’s rights irrevocably out of reach.  That proposition is sufficient, in KC’s view, to establish the date at which the cause of action in contract accrued.   The further element required for the cause of action in tort is actual damage, which KC says must have occurred the moment Parkbrook entered into agreements with purchasers based on the ASP.  At that point, says KC, Parkbrook lost valuable rights.

[68]     I think it is tenable for Fifer to argue that the breach of the relevant duties occurred at a point subsequent to either the time of drafting of the ASP, or the time Parkbrook entering into agreements based on the ASP.  I say that for three reasons.

[69]     First there is the allegation that the retainer, which comprises the basis for the allegedly breached duties, was a continuing one which covered the full range of legal advice required for the completion of the Development.   Against that context, the preservation of Parkbrook’s rights, as I see it, was an instruction that could have been achieved in a number of ways and at a number of points in the course of the retainer.   On Fifer’s  analysis  KC, as the solicitors acting for  the parties  to  the Development, had to exercise its skill and care in determining when and how to best discharge the instructions provided to it by Parkbrook.   That might have been achieved by drafting the ASP so as to contractually bind the purchasers to consent to the development of the seventh floor.  Alternatively, says Fifer, that could have been achieved later in the process consistent with the terms of the retainer.  As the retainer was a continuing one, and the instruction to preserve Parkbrook’s rights was current throughout the course of the retainer, KC did not breach its duties until that instruction was not capable of being discharged.  Fifer says that that point did not arise until, at the earliest May 1999 and, at the latest April 2000.

[70]     That brings me to the second point, which is that Fifer’s argument rests on the proposition that, had KC taken steps in relation to the building contract or the unit plan, this would have resulted in the preservation  of  Parkbrook’s  rights  in relation to the seventh floor.  If that proposition is untenable then KC is right to say that Parkbrook’s rights were put irrevocably beyond reach between April and June

1997.

[71]     That is a difficult proposition to either verify or falsify because the loss of Parkbrook’s rights is not a simple matter of evidence.   Rather, it resulted from Rodney Hansen J’s findings in Gieseg and Kline.  Prior to the issue of that judgment, Fifer proceeded on the understanding that it did have the  rights to develop the seventh floor.  It was only in the wake of that judgment that it became clear that it did not have the rights it thought it had.  In part, therefore, the tenability of Fifer’s pleading that KC could have preserved Parkbrook’s rights by taking steps in relation to the building contract or the unit plan requires me to consider whether, as a matter of law, that would have resulted in a different outcome in Gieseg and Kline.  To that end, counsel for Fifer put considerable effort in his submissions into analysing Rodney Hansen J’s reasoning.

[72]     I have already summarised in detail the Judge’s reasoning, but, briefly, his judgment holds that the nature of the unit plan was such that the proposed seventh floor development constituted a redevelopment under the Act.   Accordingly, unanimous consent was required.  Fifer sought to rely on two instruments which it said bound the purchasers to give their consent: the ASP and the body corporate rules.  The Judge held that the body corporate rules were invalidly made and, in any event, could not have achieved Fifer’s purpose.   Whether the ASP bound the purchasers  in  the  manner  contended  by  Fifer  depended  on  what  was  meant  by

‘development’ in the ASP.  The Judge held that ‘development’ referred to a six level building.   He reached that conclusion because (a) that is what was actually constructed, and (b) the building contract did not contemplate a staged construction.

[73]     Fifer says therefore that, on the basis of this reasoning, KC could have taken either of two steps (or advised Parkbrook in such terms).  On the one hand KC could have deposited a unit plan that provided for a separate unit in the airspace above units 6B and 6C.  Had it done so, the proposed seventh floor development would not have required the subdivision of the existing units and the creation of new units.  It thus would not have constituted a “redevelopment”.  On the other hand, KC could have advised the drafting of the building contract differently: it could have made it clear the Development was to be a staged one or it could have advised the exercise of the option under the contract to add the seventh floor.   Those steps would have

changed the matrix of fact around Rodney Hansen J’s finding that the “development”

comprised six floors.

[74]     I note KC’s submission to the effect that the terms of the building contract were set prior to May 1999 and therefore any breach in the drafting of that contract predates the limitation deadline.   However I think the remaining points provide a tenable argument that, had those steps been taken, the result in Gieseg and Kline might well have been different.  In reaching that conclusion I consider it particularly relevant that the Judge, at paragraph [25], emphasised that the issue was fundamentally one of fact.  The steps outlined by Fifer would certainly have changed the  factual  matrix  to  an  extent  that  a  different  outcome  might  have  followed. Whether a different outcome necessarily would have followed is a question that cannot be resolved solely on the pleadings, and therefore cannot be a proper question for a strike out application.

[75]     The final point is that Fifer’s argument turns in large part on the nature of KC’s retainer, as that is the first port of call in determining KC’s duties.   Fifer’s argument is that the retainer was of a sufficiently general character that KC was required to exercise its own judgment and discretion as to when and how to achieve the preservation of Parkbrook’s rights.  That is fundamentally a question of fact that must be determined on the evidence at trial.  Accordingly, I am not prepared to hold that Fifer’s argument is untenable.

[76]     KC’s argument to the contrary was that Parkbrook suffered actual damage as soon as it entered into agreements based on the ASP and therefore both causes of action must necessarily have accrued by this date.   Counsel for  KC before me referred to a number of authorities establishing that damage occurs when a disadvantageous transaction is entered into, notwithstanding that the full extent of the damage may crystallise later.   He referred me to the small number of cases in which the accrual of the cause of action has postdated the entry by the plaintiff into the transaction and argued that those cases were confined to the situation where the defendant’s negligence caused the plaintiff to suffer a genuinely contingent liability, in which case the occurrence of the contingent event triggers actual liability for the

plaintiff.  KC referred to Wardley v State of Western Australia (1992) 175 CLR 514, Nykredit Mortgage Bank plc v Edward Erdman Group (No. 2) [1988] 1 All ER 305, Progeni Corporation of New Zealand v Progeni International Ltd [1990] 1 NZLR

109 and the recent New Zealand Court of Appeal decision in Davys Burton v Thom [2007] NZCA 215. Before me, counsel for Fifer did not seek to deny the authority of those decisions. Rather, he argued that the negligent drafting of the ASP did not cause Parkbrook to suffer immediate disadvantage of any kind, as the preservation of its rights was not put out of reach until much later. In that sense, the liability was genuinely contingent and, moreover, preventable until comparatively late in the process. Whether that argument succeeds at trial is not a question I need answer. Under the circumstances here, I accept that it is tenable for the purposes of the present strike out application.

Contrary to Midland Bank?

[77]     In Midland Bank the owner of a farm, W, agreed to give the plaintiff an option to purchase the farm at any time during the following ten years.  To effect this agreement W and the plaintiff attended upon the defendant solicitors, who drew up the agreement.  In order to ensure that W did not then subsequently convey the farm to a third party, it was necessary to register the option as an estate contract.  This the defendant solicitors did not do.  Six and a half years later the plaintiff endeavoured to exercise the option, but W had some two months previously conveyed the property to his wife.

[78]     The plaintiff sued the defendant solicitors under the retainer  and in tort. However, because their initial failure to register the option had occurred over six years previously, it was necessary to identify some subsequent duty, within the limitation period, which the defendant solicitors had breached.   Absent that, the claim was statute barred.

[79]     KC relies on Midland Bank as advancing two principles.  The first is that a solicitor who has acted negligently does not come under a continuing duty to take care to remind himself of the negligence of which he is guilty but unaware.   The

second is that a solicitor has no continuing or further obligation in respect of a specified duty once events have put it out of his or her power to perform.

[80]     In  my  view,  however,  Fifer’s  argument  does  not  offend  against  those principles.   Fifer’s point is that KC was not negligent or in breach of the retainer until events had advanced to such a stage that Parkbrook’s rights were irrevocably out of reach.  That point did not arrive until after May 1999.  Therefore, a cause of action alleging that KC was required to take steps in relation to the building contract and unit plan does not entail KC identifying its own past negligence in relation to the ASP as KC’s negligence had not  crystallised until the chain of documents was complete.

[81]     As I see it, the present situation is closer to that identified by the Court in

Midland at p 610-611, where the Court said:

The reality is that the plaintiff’s complaint is not that the option was not registered within a reasonable time (which caused no conceivable loss to anyone) but that it was not registered at all.  The defendants simply did not perform their contract and if their continued failure constituted a repudiation it was not one which was known to [the plaintiff] and, not being accepted, gave rise to no cause of action until events put it out of their power any longer to perform.

[82]     That is the nature of Fifer’s case here.  Fifer does not argue that KC’s duty was solely to properly draft the ASP, rather Fifer contends that the duty was to constitute the chain of documents in such a way that Parkbrook’s rights were ultimately preserved.  That duty was not breached until the building contract and unit plan were deposited and the legal and factual matrix discussed by Rodney Hansen J in Gieseg and Kline became fixed.

[83]     I  conclude,  therefore,  that  Fifer’s  argument  does  not  offend  against  the principle in Midland Bank.

Founded on the current pleadings?

[84]     KC objects to Fifer’s argument on the basis that the current pleadings make no allegations about the nature or terms of the building contract or unit plan or KC’s particular failures in respect of those instruments.  KC points out that the building

contract does not feature in the factual narrative in the current pleadings. The short point is there is no basis in the pleadings for the argument Fifer now advances.

[85]     In my view that submission is well-founded.   The pleadings focus on the terms of the ASP and the process by which the units were sold and then on-sold, concluding with a discussion of the legal consequences as held by Rodney Hansen J. The pleadings in their current form as I see it do not contain allegations sufficient to found the causes of action as conceived by Fifer in its argument before this Court. Fifer’s answer to this is the application to amend the current statement of claim to further particularise the allegations of breach of duty in relation to the building contract and unit plan.  KC says however that the proposed amendments constitute fresh causes of  action,  and  therefore  the  limitation  period  is  moved  forward  to August 2001 (six years prior to the application to amend being made).  Accordingly the causes of action are statute barred in any event and KC’s position is that leave should not be granted here to file the proposed amended statement of claim.  I turn to consider that issue now.

Fresh causes of action?

[86]     The Court cannot grant leave to file an amended pleading under Rule 187(3) if to do so would involve the pleading of a new cause of action which is statute barred.  A cause of action is a factual situation the existence of which entitles one person to obtain from the court a remedy against another: Letang v Cooper [1965] 1

QB 232, 242-243.

[87]     In Chilcott v Goss [1995] 1 NZLR 263 the Court of Appeal said that the test of whether an amended pleading raises a fresh cause of action for the purpose of rules relating to amendment was that set out in Smith v Wilkins and Davies Construction Co Ltd [1958] NZLR 958, 961, namely whether the new pleading was something essentially different from that which was pleaded earlier. The change in the character of the pleading may be brought about by alterations in matters of law, or of fact, or both. In each case it is a question of degree.

[88]     The Court in Chilcott noted that that test had been adopted in Gabites v Australasian T & G Mutual Life Assurance Society Ltd [1968] NZLR 1145, where the Court of Appeal approved the following passage from Harris v Raggatt [1965] VR 779 at 785:

If  we  say  that  the  law  is  that  the  plaintiff  cannot  be  allowed,  after  the  period  of limitations has run, to set up a new cause of action, we use the term in a special sense as meaning a ‘new case’ varying so substantially from what has previously been set up that it would involve investigation of matters of fact or questions of law, or both, different from what have already been raised and of which no fair warning has been given, so that it would be unfair and unjust to the defendant to put him in peril of a judgment founded on the new matter.  Certainly, if there is set up a ‘new case’ on the facts, upon which is based a new claim upon a new and different legal basis – a new cause of action in that sense – leave will ordinarily be refused.

[89]     Fifer has proposed two separate amendments to the current pleadings.  First, it seeks to file a complete amended statement of claim, the current version of which is dated 22 September 2006.   Secondly, it seeks to further amend the September

2006 proposed amended statement of claim by particularising the allegations relating to the building contract and unit plan advice.  That particularisation would involve adding to the allegations regarding KC’s retainer at 2.5(ia) and 2.5(ib) the following paragraphs:

Providing advice and services relating to the preparation and execution of the building contract and/or triggering the clause in that contract permitting the inclusion of the seventh floor development rights.

Providing advice and services relating to compliance with the Unit Titles Act provisions and the need to and/or the ability to deal with a redevelopment under that Act of the seventh floor (Unit C5).

[90]     The issue is whether either of these proposed amendments constitutes a fresh cause of action.  If that is the case then they are statute barred and leave will not be granted.

[91]     If leave to file the September 2006 proposed amended statement of claim is refused then, in the alternative, Fifer seeks to add the particularised paragraphs set out above to its current pleadings at 8(e) and 8(f).  I emphasise that, on the analysis that Fifer has advanced in order to answer KC’s limitations defence, it will be necessary to add the particularised paragraphs.  If I am not prepared to grant leave in respect of that proposed amendment, then the current statement of claim will not

substantiate Fifer’s argument as I see it and the claim must be struck out.  The same is not necessarily the case with regard to the September 2006 proposed amended statement of claim.  If I decline leave to file that amendment then Fifer can rely on its current pleadings with the addition of the particularised paragraphs.

September 2006 proposed amended statement of claim

[92]     Under Fifer’s current pleadings, its right to sue KC in respect of the Development derives from the assignment of Parkbrook’s rights of action to Fifer. The proposed amended statement of claim places Fifer’s locus standi on a different footing, alleging that KC owed retainer and tortious duties directly to Fifer.   The proposed amended statement of claim contains three causes of action:

a)        Breach of retainer duties owed to Parkbrook and Fifer;

b)       Breach of contractual obligations to Fifer in relation to the Unit 6C

transaction;

c)        Negligent breach of tortious duties owed to Parkbrook and Fifer.

[93]     KC argues that these causes of action are fresh.  It points out that the current statement of claim does not allege any retainer by Fifer, any services or advice given to it or any reliance by Fifer on KC.   Under the current statement of claim the retainer is expressly pleaded to be a retainer by Parkbrook, commencing December

1995 and extending to all aspects of the Development.

[94]     Fifer’s answer to this is that the retainer by Fifer is implied in the current statement of claim.  The current statement of claim pleads that KC “acted as solicitor for Parkbrook in all aspects of the Development”.   Fifer says that, although not pleaded,  an  aspect  of  that  Development  was  the  communicated  intention  of Parkbrook to transfer its ownership of certain interests in the Development to Fifer. Accordingly, it was always contemplated that KC would owe obligations directly to Fifer by virtue of Fifer’s future proprietary interest.

[95]     The proposed amendments in the September 2006 statement of claim in my view do constitute fresh causes of action.   The addition of an allegation of duties owed personally to Fifer is essentially different to what was earlier pleaded both in law and in fact.  That allegation places the causes of action on an entirely different footing and is properly characterised as a ‘new case’ in the way that term was used in Gabites.   I reject Fifer’s argument that the new pleading was implied in the old pleading.  As I see the position, it is not possible in any real sense to read the current pleadings as suggesting in any way that KC’s retainer contemplated duties owed personally to Fifer.  Quite the opposite, in fact.  The current pleadings expressly base Fifer’s locus standi on the assignment of Parkbrook’s rights to Fifer on liquidation. Further,  Fifer’s  ‘implication’  depends  on  the  Court  accepting  an  additional unpleaded circumstance – that it was always contemplated that certain Development interests  would  be  transferred  to  Fifer.    Hence,  the  implication  in  the  current pleading does not become clear until that further, unpleaded, fact is introduced.

[96]     Whether a proposed pleading constitutes a fresh cause of action is a matter of degree.   In my view the September 2006 proposed amended statement of claim constitutes fresh causes of action.  It is therefore statute barred, having been raised outside the limitation period.  I therefore decline leave to amend the pleadings in the manner provided for in that proposed statement of claim.

Particularised paragraphs

[97]     KC also argues that the particularised paragraphs constitute fresh causes of action.  They note that allegations regarding the building contract and unit plan have not been pleaded before and that those are entirely separate agreements to the agreement – the ASP – on which Fifer has previously relied.

[98]     I disagree.  In my view, those allegations are properly characterised as further particulars of the breach that constitutes the causes of action already pleaded in the current statement of claim, rather than as fresh causes of action.  Those allegations are consistent with the current pleadings and simply serve to further detail the nature of the breaches that Fifer alleges were committed by KC.

[99]     In my view the following sections of the current pleadings clearly illustrate this:

a)       At paragraph 7 Fifer alleges that Parkbrook instructed KC to act as its solicitors “on all aspects of the Development”.

b)At paragraph 22(c) Fifer alleges that KC was instructed to take all proper legal steps to ensure that owners of the units “were bound to take all steps necessary to ensure the construction of a seventh floor of the Development after completion of the six floors”.

c)At paragraph 48 Fifer pleads in detail the reasoning that led Rodney Hansen J to hold that Fifer did not have the right to compel the unit titleholders  to  consent  to  the  seventh  floor  development.     That includes the finding that ‘development’ as defined in the ASP meant the building that was actually constructed and that the seventh floor development constituted a redevelopment under the Unit Titles Act.

d)Under the first cause of action, at paragraph 49, Fifer outlines the chain of alleged failures that led to the loss of Parkbrook’s rights to develop the seventh floor.  At 49(g) and (h) Fifer pleads KC’s failure to take steps to preserve Parkbrook’s intentions under paragraph 22.

e)       Under the second cause of action, at paragraph 55, Fifer repeats its allegations in paragraph 49.

[100]   Those sections demonstrate that Fifer’s analysis in defence of this strike out proceeding is consistent with the allegations it has pleaded to date.  The paragraphs that Fifer proposes to insert into the current statement of claim are consistent with those allegations and serve to particularise them further.  The proposed amendments in my view do not change the essential character of the case pleaded against KC, which at all times has been based on KC’s failure to ensure the preservation of Parkbrook’s rights in the course of the advice it gave on the various aspects of the Development.

[101]   I conclude that the proposed amendments do not constitute fresh causes of action and are not statute barred, and therefore I grant leave to amend the current pleadings by adding the paragraphs quoted in [89] above as paragraphs 8(e) and 8(f) of the current statement of claim.

Conclusion

[102]   The application to amend the pleadings is granted to the extent outlined at para [101] above.

[103]   The defendant’s application to strike out the statement of claim is dismissed.

[104]   As to costs these are reserved.  If counsel are unable to agree on this issue then they are to file memorandum as to costs sequentially (counsel for the plaintiff first) and I will decide the question of costs based upon the material before the Court.

“Associate Judge D I Gendall”

Solicitors:        Lowndes Associates, Auckland for Plaintiff

Jones Fee, Auckland for Defendant