Hellaby Resource Services Ltd v Body Corporate 197281 - [2021] NZHC 1329

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000869

[2021] NZHC 1329

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

Hearing: 8 March 2021

Appearances:

R J Hollyman QC and N G Lawrence for the Counterclaim Plaintiff

P Hunt and T W Clark for the Second Counterclaim Defendant C Laband and R Tosh for the Third Counterclaim Defendant

Judgment:

8 June 2021

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 8 June 2021 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

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

HELLABY RESOURCE SERVICES LTD v BODY CORPORATE 197281 [2021] NZHC 1329 [8 June 2021]

Introduction

[1] This proceeding concerns weathertightness remediation works undertaken on a multi-unit complex under a construction contract. The proceedings were commenced by the construction company pursuing the principal, the Body Corporate of the complex, for unpaid amounts said to be due under the construction contract. The Body Corporate counterclaimed against the construction company, the engineer to the contract and an advisory body involved in the project.

[2] The engineer and the advisory body now apply to strike out the counterclaim against them. They argue that the relief sought in the counterclaim is not related to or connected with the original claim by the plaintiff. The Body Corporate opposes the application.

Background

[3] TBS Remcon Ltd (TBS),1 a construction company, undertook weathertightness remediation work for Body Corporate 197281 (the Body Corporate) on a 99-unit apartment complex at 68 Mountain Road, Panmure, Auckland (the Complex). TBS and the Body Corporate entered into a construction contract on around 14 November 2014 (the Construction Contract) governed by the Construction Contracts Act 2002 (the CCA).

[4] Maynard Marks, building and construction consultants and engineers, carried out early investigative, design and planning work for the Body Corporate, and was the Engineer to the Construction Contract. HOBANZ Consulting Ltd (now HOBANZ Project Assist Ltd) and its predecessor Lighthouse NZ Ltd (together, HPAL) provided the Body Corporate with advice prior to and throughout the project.

[5] The remediation work began in around November 2014. As work progressed, TBS identified further defects. Costs escalated. To control costs, in June 2018 the Body Corporate and TBS agreed a fixed price to complete the remediation works, of

1 TBS changed its name to SRG Global Remediation Services (NZ) Ltd on 24 November 2020. For the purposes of this judgment, I have referred to the company as TBS throughout.

$35 million excluding GST. That agreement was documented in a Deed of Variation (the Variation Agreement).

[6] The first block of the Complex was completed in December 2016; the final block on 22 June 2018. Maynard Marks issued practical completion certificates and end…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2021] NZHC 1329
Decision Date: 8 June 2021

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, was presented with an application to strike out the counterclaim in a case involving weathertightness remediation works on a multi-unit complex. The construction company, Hellaby Resource Services Limited (formerly TBS Remcon Ltd), had pursued the Body Corporate of the complex for unpaid amounts under a construction contract. The Body Corporate counterclaimed against the construction company, the engineer (Maynard Marks), and an advisory body (HOBANZ Project Assist Limited, formerly Lighthouse NZ Ltd) involved in the project. The engineer and the advisory body applied to strike out the counterclaim, arguing that the relief sought was not related to or connected with the original claim by the plaintiff. The Body Corporate opposed the application.

The court needed to decide whether the counterclaim against the engineer and the advisory body was related to or connected with the original subject matter of the proceeding, as required by High Court Rules. The court also needed to consider whether striking out the counterclaim would achieve the just, speedy, and inexpensive determination of the proceedings.

The court held that the counterclaim against the engineer and the advisory body was related to the original subject matter of the proceeding, as all the counterclaims concerned allegations of failings in relation to the remediation works on the complex. The court also found that striking out the counterclaim against the engineer and the advisory body would not achieve the just, speedy, and inexpensive determination of the proceedings, as it would result in two separate counterclaims proceeding through the court in relation to the one remediation project. The interlocutory applications by the second and third counterclaim defendants to strike out the counterclaim were dismissed, and the unsuccessful parties were ordered to pay the Body Corporate's costs.

The court directed the Registry to allocate a case management conference at the earliest opportunity, and the parties were directed to confer to agree timetable directions for the progression of the proceeding and to file a joint memorandum not later than two working days before the conference. Any areas of disagreement were to be identified in the memorandum.

Orders