Hellaby Resource Services Limited v Body Corporate 197281

[2022] NZHC 330

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000869

[2022] NZHC 330

BETWEEN

HELLABY RESOURCE SERVICES LIMITED
First Plaintiff / Fourth Counterclaim Defendant

SRG GLOBAL REMEDIATION SERVICES (NZ) LIMITED
Second Plaintiff / First Counterclaim Defendant

AND

BODY CORPORATE 197281

Defendant / Counterclaim Plaintiff

MAYNARD MARKS LIMITED
Second Counterclaim Defendant

HOBANZ PROJECT ASSIST LIMITED

Third Counterclaim Defendant

CIV-2020-404-000513

BETWEEN

PAUL JOHN McCORMACK & ORS
Plaintiffs

AND

MAYNARD MARKS LIMITED

Defendant

Hearing:

8 February 2022

Appearances:

P Hunt / T W Clark for Maynard Marks

R J Hollyman QC / W Revell for Body Corporate 197281 R Tosh for HOBANZ

M Ring QC / L J Douglas for the Plaintiffs in CIV-2020-404-513 A R Galbraith QC / J Q Wilson for Hellaby and SRG

Judgment:

3 March 2022

HELLABY RESOURCE SERVICES LTD v BODY CORPORATE 197281 [2022] NZHC 330 [3 March 2022]

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 3 March 2022 at 10.30 a.m. pursuant to Rule 11.5 of the High Court Rules.

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

Introduction

[1]    Maynard Marks Limited  (Maynard  Marks)  applies  under  r  10.12  of  the High Court Rules 2016 for orders that proceedings CIV-2020-404-513, McCormack v Maynard Marks Ltd (the McCormack proceeding), and CIV-2019- 404-869,  Hellaby  Resource  Services  Ltd  v   Body   Corporate   197281   (the Body Corporate proceeding) are case managed and heard together, and that the evidence given in each proceeding is cross-admissible.

[2]    Body Corporate 197281 (Body Corporate) and HOBANZ Project Assist Limited (HPAL) support the application in part, advocating for joint case management and a staged approach to consolidation. Mr McCormack and the other plaintiffs in the McCormack proceeding (McCormack plaintiffs), Hellaby Resource Services Ltd (Hellaby) and SRG Global Remediation Services (NZ) Limited (SRG) oppose the application.

[3]    In deciding whether to exercise my discretion under r 10.12, I will consider the extent of commonality between the proceedings. If the threshold of sufficient commonality between the proceedings is met, I will consider and weigh the discretionary factors to determine whether it is in the interests of justice to make the orders sought. Specifically, I will consider:

(a)time and costs savings;

(b)the risk of inconsistent findings; and

(c)prejudice to the parties.

[4]    My approach will be to first consider whether the proceedings should be heard together. If the answer to that question is yes, naturally the proceedings will be case managed together. If the answer to that question is no, or that a decision should not be made now, I will then consider whether the two proceedings should be case managed together and the question of a concurrent hearing kept under review.

Background1

The remediation project

[5]    Mountain View Apartments is a 99-unit  residential  apartment  complex  at 68 Mountain Road, Panmure, Auckland which had extensive weathertightness issues.

[6]    In about November 2014, the Body Corporate contracted with TBS Remcon Ltd (now known as SRG), a construction company, to remediate the weathertightness issues at Mountain View (the Construction Contract).

[7]    Maynard Marks, building and construction consultants, carried out early investigative, design and planning work for the Body Corporate, and was the Engineer to the Construction Contract.

[8]    HOBANZ Consulting Ltd (now HPAL) and its predecessor Lighthouse NZ Ltd provided the Body Corporate with advice prior to and throughout the remediation project.

[9]    The remediation work began in around November 2014. As the remediation work progressed, SRG identified further defects. Costs escalated. To control costs, in June 2018 the Body Corporate and SRG agreed a fixed price to complete the remediation works of $35 million excluding GST (the Variation Agreement).

[10]The remediation work was completed by SRG in about July 2018.

1      The background to the proceedings is set out in Hellaby Resource Services Ltd v Body Corporate 197281 [2021] NZHC 554 and Hellaby Resource Services Ltd v Body Corporate 197281 [2021] NZHC 1329.

[11]   The Body Corporate paid SRG a total of $32,188,700.35 of the agreed contract price. It refused to pay the balance of $2,826,299.65 (the Unpaid Balance), claiming that certain areas of work remain incomplete, defective, and/or non-compliant with the Building Code and building consents.

The Body Corporate proceedings

[12]   In or about May 2019, Hellaby sought summary  judgment  against  the  Body Corporate in relation to the Unpaid Balance. It claimed that it was entitled to enforce the debt pursuant to an assignment from TBS Remcon Ltd, which it had owned throughout the project but had since sold. Hellaby’s application for summary judgment was unsuccessful because the Body Corporate had not agreed to the assignment.

[13]   In or about August 2020, SRG was joined to the Body Corporate proceeding as a second plaintiff. SRG sought summary judgment against the Body Corporate for the Unpaid Balance plus contractual interest.

[14]   On 1 September 2020, the Body Corporate filed a statement of defence and counterclaim against Maynard Marks, HPAL, SRG and Hellaby.

[15]   The Body Corporate claims against Maynard Marks for its alleged lost opportunity to demolish and rebuild Mountain View and/or the cost of repairing the alleged defective remediation work undertaken by SRG.

[16]   The Body Corporate similarly claims against HPAL for the alleged lost opportunity to demolish and rebuild Mountain View and/or the cost of repairing the alleged defective remediation work undertaken by SRG.

[17]   The Body Corporate counterclaims against SRG and Hellaby for the cost of remedying the alleged defective remediation work. SRG/Hellaby have protested the Court’s jurisdiction to hear the counterclaim and sought a stay of the counterclaim on the basis that any dispute arising out of the Construction Contract must be resolved by arbitration.

[18]On 14 April 2021, this Court:2

(a)entered summary judgment against  the  Body  Corporate  in  favour of  SRG,  but  stayed  enforcement  of  that  judgment  until   the  Body Corporate’s counterclaim against the SRG and Hellaby has been determined or until further order of the Court, and

(b)dismissed Hellaby/SRG’s application for a stay of the counterclaim.

[19]   Hellaby/SRG has appealed against the orders staying enforcement of the summary judgment and declining to stay the Body Corporate’s counterclaim. The Body Corporate has cross-appealed the entry of summary judgment.

[20]   If the Court of Appeal determines that the counterclaim should be stayed so that it can be determined by arbitration, Hellaby/SRG will not be a party to the substantive hearing of the CIV-2019-404-869 proceeding.

The McCormack proceeding

[21]   In the McCormack proceeding, a group of approximately 55 current and former owners of apartments at Mountain View have claimed against Maynard Marks in relation to alleged negligent advice to repair rather than demolish and rebuild Mountain View. The McCormack plaintiffs have quantified their loss in relation to their alleged lost opportunity to demolish and repair Mountain View as being

$20,000,000.3 The Body Corporate is not a party to the McCormack proceeding.

Legal principles

[22]   Rule 10.12 of the High Court Rules permits the Court to order that two or more proceedings be consolidated on terms it thinks just. It may make this order if it is satisfied:

(a)that some common question of law or fact arises in both or all of them; or

2      Hellaby Resource Services Ltd v Body Corporate 197281 [2021] NZHC 554.

3      Second Amended Statement of Claim.

(b)that the rights to relief claimed therein are in respect of or arise out of —

(i)the same event; or

(ii)the same transaction; or

(iii)the same event and the same transaction; or

(iv)the same series of events; or

(v)the same series of transactions; or

(vi)the same series of events and the same series of transactions; or

(c)that for some other reason it is desirable to make an order under this rule.

[23]   As the Court of Appeal has confirmed, the Court’s discretion to make an order under r 10.12 is wide.4 As well as ordering that proceedings be consolidated, the Court may order the proceedings to be tried simultaneously but without consolidation, order them to be tried sequentially, or order one to be stayed until the other has been determined. The Court’s discretion must be exercised broadly in the interests of justice.5 This involves balancing considerations of justice, convenience and expense.6

[24]Factors that weigh in favour of making a r 10.12 order include that:

(a)time and cost for the parties and the court will be saved;7

(b)judicial resources will be utilised more efficiently;8

(c)the risk of inconsistent findings of fact and/or law will be eliminated or decreased.9

[25]On the other hand, considerations that weigh against an order include that:

4      Regan v Gill [2011] NZCA 607 at [10].

5 At [10].

6      CallPlus Ltd v Telecom New Zealand Ltd (2000) 15 PRNZ 14 (HC) at [44].

7      Medlab Hamilton Ltd v Waikato District Health Board (2007) 18 PRNZ 517 (HC) at [8].

8 At [8].

9      CallPlus Ltd v Telecom New Zealand Ltd, above n 6, at [51].

(a)the parties may suffer confusion, prejudice or even oppression due to the size and complexity of a consolidated proceeding;10

(b)one proceeding is ready for trial whereas the other is not.11

[26]   As always, the Court will aim to achieve the objective of the High Court Rules, which is to secure the just, speedy and inexpensive determination of the proceedings.12

Commonality between the proceedings

[27]   Commonality is the threshold issue.13 It must be demonstrated that there are common questions of law and/or fact, and/or that the relief claimed is in respect of or arising out of the same event or transaction, such that there is a “sufficient common thread” linking the proceedings.14 Key considerations are:

(a)the parties to the proceedings;15

(b)whether the proceedings raise the same underlying or key issues;16

(c)whether there is substantial overlap of factual and legal issues;17

(d)whether there is “overlap” between witnesses;18

(e)the nature of the relief claimed.

[28]   Maynard Marks’ application is based on commonality between the McCormack plaintiffs’ claim against Maynard Marks and the Body Corporate’s lost opportunity claim against Maynard Marks and HPAL. All parties including the McCormack plaintiffs, Hellaby and SRG concede that there is enough commonality

10     At [41]-[45].

11     Lawrence Riverside Ltd v Colliers International NZ Ltd HC Auckland CIV-2011-404-1486, 30 June 2011 at [26]; see Enviro Waste Services Ltd v Remediation (NZ) Ltd [2021] NZHC 3270.

12     High Court Rules 2016, r 1.2.

13     Hunter Grain Ltd v Price HC Tauranga CIV-2008-470-192, 11 August 2010 at [11].

14     Skyline Finance Ltd v Burbery Finance Ltd HC Christchurch CP90/89, 28 June 1989 at 7.

15     See Medlab Hamilton Ltd v Waikato District Health Board, above n 7, at [9].

16 At [9].

17     Hunter Grain, above n 13, at [16].

18     Allott v Mark [2021] NZHC 1100 at [19].

to pass the procedural gateway of r 10.12 and engage the broad discretionary jurisdiction under that rule. The parties disagree on the weight that should be given to that commonality under the discretionary analysis.

[29]   Mr Ring QC for the McCormack plaintiffs emphasises the non-common aspects to the proceedings. He highlights that the Body Corporate proceeding involves additional parties – Hellaby/SRG and HPAL – and the Body Corporate’s issues with those parties, and Maynard Marks, about the remediation work have no commonality with the McCormack proceeding. He points to a comparison of the pleadings which identifies that there are 78 issues in the Body Corporate’s counterclaim that have    no  relevance  to  the  McCormack  proceeding.19  Mr   Ring   submits  that  the   Body Corporate’s claim in relation to the allegedly defective remediation work is the “elephant” in that proceeding; whereas the Body Corporate’s lost opportunity claim against Maynard Marks and HPAL is the “mouse”.

[30]   Mr Alan Galbraith QC for Hellaby/SRG also submits that the non-overlapping claims comprise most of the claims in the Body Corporate proceeding.  These are  the Body Corporate’s counterclaims against SRG, Hellaby and HPAL; and the non-overlapping claims against Maynard Marks in relation to the allegedly incomplete and defective construction work.

[31]   Before analysing the extent of the commonality, I summarise the nature of the claims with respect to each party involved in the two proceedings:

(a)Maynard Marks faces claims by the McCormack plaintiffs and the Body Corporate about their assessment and advice during the pre-construction period. That is, their advice on the nature, extent and likely cost of work to remediate the complex; their recommendation to repair rather than demolish and rebuild the complex; and their advice to enter into the Construction Contract with TBS to undertake the remedial work. Additionally, Maynard Marks faces a claim by the Body Corporate for failures as Engineer to the Construction Contract during the construction period.

19     Affirmation of Ross Andrew Dallow dated 10 November 2021, Schedule 1.

(b)HPAL is also sued by the Body Corporate for alleged failures during both the pre-construction and construction period. Specifically, the Body Corporate claims that HPAL, who it engaged even before Maynard Marks, negligently advised it to:

(i)proceed with the repair works based on Maynard Marks’ surveys and reviews;

(ii)enter into the Construction Contract and Variation Contract with TBS;

(iii)pay for variations to the Construction Contract and follow Maynard Marks’ advice to accept variations;

(iv)pay the full price to TBS despite defective and incomplete work.

(c)Hellaby/SRG faces a claim from the Body Corporate for allegedly defective and incomplete remediation work. This claim concerns only the construction period and Hellaby/SRG has no direct interest in the Body Corporate’s or McCormack plaintiffs’ claims concerning the pre-construction period.

(d)The McCormack plaintiffs’ claim arises only out of events during the pre-construction period. The relief they claim is losses arising out of the lost opportunity to demolish and rebuild.

(e)The Body Corporate’s claims span both pre-construction and construction. In relation to the former, they claim losses arising out of the lost opportunity to demolish and rebuild. In relation to the latter, they claim the cost of repairing the alleged defective remediation work.

[32]   As conceded by all parties, there is enough commonality to pass the commonality threshold in r 10.12 to engage the discretion.

[33]   As to the extent of the commonality for the purposes of the discretionary analysis, it can be summarised as follows.

[34]   First, in terms of r 10.12(b), the rights to relief claimed from Maynard Marks by the Body Corporate and the McCormack plaintiffs in relation to the lost opportunity to demolish and rebuild arise out of the same events and transactions. Namely, Maynard Marks’ assessment and advice to the Body Corporate and the McCormack plaintiffs during the pre-construction period on the nature, extent and likely cost of work to remediate the complex, their advice to repair rather than demolish and rebuild the complex, and to enter into a contract with TBS to undertake the remedial work.

[35]    Similarly, the Body Corporate’s claim to relief from HPAL in relation to the lost opportunity to demolish and rebuild arises out of the same events and transactions that give rise to the relief the McCormack plaintiffs claim from Maynard Marks. The Body Corporate’s claim against HPAL is closely linked with its claims against Maynard Marks, both the lost opportunity claim arising out of the pre-construction period and the defective work claim arising out of the construction period.

[36]   Second, in terms of r 10.12(a), there are similar issues across both proceedings in respect of the claims against Maynard Marks arising out of the pre-construction period, including:

(a)Did Maynard Marks  fail  in  its  assessment  and  advice  to  the  Body Corporate and unit owners as to the nature, extent and likely cost of the work required to remediate, and by not advising the Body Corporate and owners that it would be more economic to demolish and rebuild the complex than to remediate it?

(b)Did Maynard Marks fail in advising the Body Corporate to enter into the Construction Contract with TBS?

(c)Did Maynard Marks owe the Body Corporate and owners a duty to exercise a reasonable standard of skill and care expected of a prudent building consultant providing building assessment and surveying services, and advice (including recommendations) on remedial work for weathertightness and construction defect issues?

(d)Did Maynard Marks breach that duty of care by failing to advise the Body Corporate and/or owners to demolish and rebuild Mountain View?

[37]   The allegations against HPAL by the Body Corporate are inextricably linked with the allegations against Maynard Marks. The key issues involved are:

(a)Did HPAL breach its duty of care by advising the Body Corporate to proceed with the repair works based on Maynard Marks’ surveys and reviews?

(b)Did HPAL breach its duty of care by advising the Body Corporate to enter into the Construction Contract and the Variation Contract?

[38]   Third, and relatedly, Maynard Marks’ defences to the McCormack plaintiffs’ claim and Body Corporate’s lost opportunity claim are very similar. Maynard Marks relies on terms and conditions in the engagement contracts with the Body Corporate. Additionally, it pleads affirmative defences of contractual time bar, exclusion of liability, limitation of liability under the various contracts, time bar under the Limitation Acts 1950 and 2010, and statutory limitation under the Fair Trading Act 1986. It is apparent that there will be a significant degree of contractual interpretation common to the two proceedings.

[39]   Fourth, the McCormack plaintiffs and the Body Corporate claim relief from Maynard Marks for the same kind of loss. Both claim for losses they have suffered as a result of Maynard Marks’ failure to advise them that it would be more economic to demolish and rebuild than to repair. In its second amended statement of claim dated 8 July 2020, under the heading “The Plaintiffs’ Losses”, the McCormack plaintiffs

plead that if Maynard Marks had advised the Body Corporate to demolish and rebuild Mountain View at the outset, the total cost would have been approximately

$15 million, representing a saving in the order of $20 million over the costs of the remediation work (of $35 million). The McCormack plaintiffs state that they have lost at least $20 million as a result of the breach. In their prayer for relief, the McCormack plaintiffs seek an inquiry into the losses they have suffered as a result of Maynard Marks’ contract breaches and alleged breach of duty of care. They also claim consequential losses arising out of the extended duration of the remedial work, including the cost of alternative accommodation, of funding the repairs, relocation costs, furniture removal, storage and insurance costs.

[40]   Similarly, in its second cause of action against Maynard Marks in negligence and third cause of action for breach of s 9  of  the  Fair  Trading  Act  1986,  the Body Corporate claims an inquiry into the losses suffered by the Body Corporate as a result of the lost opportunity to demolish and replace the complex, and an order that Maynard Marks pay the Body Corporate damages so determined. The Body Corporate also claims unspecified consequential losses.

[41]   Mr Hunt, Mr Hollyman QC and Mr Ring disagreed on whether the McCormack plaintiffs and the Body Corporate were claiming the same loss, with the result that Maynard Marks faced “double jeopardy”. Mr Hunt and Mr Hollyman highlighted the part of the McCormack pleading which describes the loss suffered by the plaintiffs as $20 million. This appears to be a claim for the whole loss, sustained by all unit owners at the time, in respect of both common and unit property.

[42]   Mr Ring denied that there were overlapping claims for the same loss. He explained that the McCormack plaintiffs are former and current unit owners who were unit owners in 2014 and 2015, at the time Maynard Marks advised the Body Corporate and owners to repair the complex. The McCormack plaintiffs are claiming loss by way of higher levies, longer construction time, and ending up with apartments constructed in the 1980s (whereas had they been advised to demolish and rebuild, they would have paid lower levies, had new apartments, and faced a shorter construction time so would not have incurred the same consequential losses in the form of lost rent, alternative accommodation and so on). He submitted that there is no overlap with the

Body Corporate’s claim, as past owners no longer have any legal or beneficial interest in the complex and therefore no relationship with the Body Corporate. In respect of the McCormack plaintiffs who are current owners and do have a relationship with the Body Corporate, the Body Corporate’s claim can only be a residual one for any losses not claimed directly by those owners through the McCormack proceeding.

[43]   This discussion highlighted that there are complicated questions to resolve between the two proceedings in terms of the relief claimed by the respective plaintiffs arising out of the lost opportunity to demolish and rebuild. My impression is that this issue will be especially acute with respect to any relief claimed by the McCormack plaintiffs who are current owners for the proportion of levies they paid attributable to repair costs to common property; which the Body Corporate might also purport to claim as the contracting party and the legal owner of the common property.

[44]   I have described the areas of commonality in the two proceedings. They are considerable. But against that, there are material parts of the Body Corporate counterclaim that have no counterpart in the McCormack proceeding.

[45]   First, the Body Corporate’s claims against Maynard Marks for alleged breaches of its duties as Engineer to the Construction Contract. Specifically, the Body Corporate claims that Maynard Marks failed in its role when approving variation order requests by TBS and issuing practical and final completion certificates for the remedial work.

[46]   Second, the Body Corporate’s claims against HPAL arising out of their ongoing advice during construction, including their advice to enter into the Variation Contract.

[47]   Third, and significantly, the Body Corporate’s counterclaim against Hellaby and SRG for allegedly defective and incomplete remedial work. The events out of which this claim arises, and the legal and factual issues involved, are distinct from the Body Corporate’s lost opportunity claim and the McCormack plaintiffs’ claim. I accept the submission that, based on the Body Corporate’s pleading, that would appear to be the more substantial part of the Body Corporate’s counterclaim. I also acknowledge that litigation relating to defective construction work is typically

complicated and technical. However, the lost opportunity claim will also be complex, both factually in terms of what the counterfactual cost to demolish and rebuild would have been, and legally, especially in view of the contractual defences pleaded by Maynard Marks. Further, I am conscious that the Body Corporate’s counterclaim was filed at a time when an immediate objective must have been to deflect SRG’s application for summary judgment for the Unpaid Balance and this might have influenced the way it was drafted. Moreover, in terms of the quantum of relief claimed, the lost opportunity counterclaim potentially dwarfs the counterclaim against Hellaby/SRG.20

[48]   Against the backdrop of these areas of commonality, I will consider discretionary factors.

Discretionary factors

Time and cost savings

[49]   The approach of the Court in exercising its discretion under r 10.12 is to consider each of the discretionary factors from the perspective of each party.21

[50]   Hearing the two proceedings together will undoubtedly result in significant time and cost savings to Maynard Marks. If the proceedings are not heard together, Maynard Marks will be required to call the same evidence and make the same legal submissions on two separate occasions to support its defence to the claims.

[51]   From the Court’s perspective too, a concurrent hearing will avoid the need to hear two very similar claims twice. Besides being an inefficient use of judicial resources, separate hearings will carry the risk of inconsistent findings. I will return to that issue.

[52]   Against those interests, a concurrent hearing will  impose  additional  time and cost on the McCormack plaintiffs and Hellaby/SRG. The trial will be lengthened,

20 Estimated to be $5,235,910 by the Body Corporate: affidavit of Melanie Jayne Norris sworn 11 September 2020 at [8].

21     CallPlus Ltd v Telecom New Zealand Ltd, above n 6, at [21].

with Hellaby/SRG having no direct interest in the McCormack plaintiffs’ and the Body Corporate’s lost opportunity claims. Conversely, the McCormack plaintiffs will have no direct interest in the hearing of the Body Corporate’s construction defects claim.

[53]   However, I am mindful that the time and cost impact on these parties could be mitigated through careful case management. This might involve the McCormack plaintiffs’ claim and the Body Corporate’s lost opportunity claim being heard first, with the McCormack plaintiffs then excused from the hearing of the Body Corporate’s defective works claim against Hellaby, Maynard Marks and HPAL. Similarly, SRG/Hellaby could be excused from the first part of the hearing.

[54]   In terms of the Body Corporate and HPAL, a concurrent hearing will not necessarily impose additional time and cost as they are involved in both aspects already; that is, the pre-construction claims and the construction claims. Furthermore, a concurrent hearing will save those parties from needing to monitor and intervene  in the McCormack proceeding to protect their interests, a prospect foreshadowed by Mr Hollyman.

[55]   I conclude that the time and cost saving for Maynard Marks and the Court from a concurrent hearing is considerable; whereas any additional cost imposed on the McCormack plaintiffs and Hellaby/SRG of a concurrent hearing can be managed through careful case management.

Inconsistent findings

[56]   It has been said that the main aims of this exercise and the Court’s discretion under r 10.12 are to avoid duplication or multiplicity of proceedings, to save the parties and the Court time and therefore cost, and to avoid inconsistent approaches to and/or outcomes from cases dealing with the same events and/or transactions.22

[57]    Given the very similar legal and factual issues that will require determination by the Court in the McCormack proceeding and the Body Corporate’s lost opportunity

22 At [17].

claim against Maynard Marks and HPAL, the risk of inconsistent findings or different approaches to the issues is high. From the Court’s perspective, having two judges decide almost identical claims is most unsatisfactory. Furthermore, there is the risk of confusion about the relief claimed as between the McCormack plaintiffs and the Body Corporate. This complexity would be better managed if the same judge hears both claims and makes both awards.

[58]   I consider that this consideration points strongly towards the two proceedings being heard together by one judge.

Prejudice

[59]   Some prejudice inevitably arises whenever proceedings are ordered to be tried together.23 It can arise from factors such as loss of control and the possibility that the issues may not be identical. However, such prejudice must be balanced against the considerations of justice, convenience and expense to all affected.24

[60]   Here, the Court must weigh the prejudice to Maynard Marks if the orders are not made against the prejudice to the other parties if the orders are made. The prejudice to Maynard Marks if the orders are not made has already been discussed. It takes the form of Maynard Marks facing two very similar, complex, lengthy claims and possibly “double jeopardy” if the potential cross-over in relief is not resolved.

[61]   I have acknowledged the prejudice to the McCormack plaintiffs and Hellaby/SRG from a concurrent hearing in the form of additional time and cost. To some extent that can be managed, although probably not completely.

[62]   The most acute prejudice of the orders being made would be to the McCormack plaintiffs, in the form of delay. This arises out of the fact that the McCormack proceeding is ready or nearly ready to be set down for trial. In contrast, the Body Corporate’s claim against SRG/Hellaby, Maynard Marks and HPAL is still at an early stage, with Hellaby/SRG’s appeal to the Court of Appeal on its unsuccessful

23 At [44].

24     At [44], quoting Gair v Newnham [1974] 1 NZLR 662 (CA) at 665.

application to stay the Body Corporate’s counterclaim against it  to  be  heard  in June 2022.

[63]   I note however that as between the Body Corporate, Maynard Marks and HPAL, there is progress in that discovery has been completed. It is the claim between the Body Corporate and Hellaby/SRG that is presently stalled.

[64]   Mr Ring argues that the McCormack plaintiffs will be unfairly prejudiced if the orders are made, as they will be required to wait for the Body Corporate proceeding to be ready to set down before a trial date is allocated for a concurrent hearing. That is a fair concern.

Overall interests of justice

[65]   Balancing all these considerations, I reach two conclusions. First, it is in the overall interests of justice for the two proceedings to be heard together. The degree of commonality, the time and cost savings to Maynard Marks, the Body Corporate, HPAL and the Court, and the risk of conflicting findings if there are separate hearings, weighs heavily in favour of a concurrent hearing. I am especially concerned about this final consideration. I do not consider it acceptable to have two almost identical claims (the claims against Maynard Marks), arising out of the same events and involving almost identical legal and factual issues, heard and determined by two different judges. I am also of the view that bringing the proceedings together is necessary to address the potentially overlapping claims to the same relief by the McCormack plaintiffs and the Body Corporate. The potential prejudice to the McCormack plaintiffs and to Hellaby/SRG in the form of additional time and cost is acknowledged but is outweighed by these other considerations.

[66]    Second, it is appropriate to set down both proceedings for a concurrent trial now. The first available date for a long hearing is the third quarter of 2023. A trial that far out allows time for the Body Corporate’s counterclaim against Hellaby/SRG to catch up, if the Court of Appeal dismisses SRG’s appeal. If the Court of Appeal upholds the appeal, meaning the claim goes to arbitration, the hearing scope and duration can be reduced accordingly. Setting down a hearing now addresses the main potential prejudice to the McCormack plaintiffs arising from the orders sought, being

delay in securing a fixture. Moreover, if it is inevitable that the proceedings will be heard together (as contended by Mr Hunt, Mr Hollyman and Mr Tosh) I consider it preferable that the decision is made now so the parties can begin working towards that outcome.

[67]   I note that SRG and the Body Corporate recently resolved SRG’s application for a stay of the Body Corporate’s counterclaim pending appeal, until one month after the Court of Appeal issues its judgment on the appeal and cross-appeal. In their submissions in support of the application for a stay pending the appeal, SRG submitted that SRG could catch up with any steps taken by other parties during the intervening months, well ahead of a 2023 hearing. I made consent orders on that basis. If that agreed stay will jeopardise their readiness to have the counterclaim heard on the allocated trial date, the stay will need to be reviewed. I leave it to counsel to take the appropriate steps to ensure that the counterclaim is ready to be heard.

Result

[68]I order:

(a)the McCormack proceeding and the Body Corporate proceeding will be heard  concurrently  over  six  weeks  commencing  on  Monday  10 July 2023 at 10:00 am;

(b)evidence given in each proceeding will be cross-admissible in the other;

(c)the proceedings will be case managed together.

[69]   If counsel consider that the fixture should be longer than six weeks, they are invited to file a memorandum, preferably joint, to that effect.

[70]   I also invite counsel to agree an order for the costs associated with this application that reflects the position each party took on it. If agreement is not possible, I will accept submissions from Maynard Marks within 15 working days and the other parties within a further 10 working days.

Associate Judge Gardiner

Solicitors:

Farry Law Ltd, Auckland Bell Gully, Auckland

Adina Thorn Law, Auckland

R J Hollyman QC, Auckland A R Galbraith QC, Auckland M Ring QC, Auckland