Hitex Building Systems Limited v Wilkinson Building & Construction Limited

[2013] NZHC 913

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-001123 [2013] NZHC 913

IN THE MATTER OF     an appeal under Section 93 of the Weathertight Homes Resolution Services Act 2006

BETWEEN  HITEX BUILDING SYSTEMS LIMITED First Appellant

IAN CONRAD HOLYOAKE Second Appellant

ANDWILKINSON BUILDING & CONSTRUCTION LIMITED First Respondent

R A J WILKINSON Second Respondent

AUCKLAND COUNCIL Third Respondent

R J & S K ZAGORSKI Fourth Respondents

T BURCHER Fifth Respondent

R ANGEL

Purported Third Party

Hearing:         16 April 2013

Counsel:         A J Thorn for the Appellants

C D Boell for the First and Second Respondents; and for
M C Black for the Fifth Respondent
P A Robertson for the Third Respondent
S Robertson and E E Cowle for the Fourth Respondents
No Appearance of or for the Purported Third Party

Judgment:      30 April 2013

HITEX BUILDING SYSTEMS LTD and ANOR v WILKINSON BUILDING & CONSTRUCTION LTD and

ORS HC AK CIV-2012-404-001123 [30 April 2013]

JUDGMENT OF DUFFY J

This judgment was delivered by Justice Duffy on 30 April 2013 at 4.30 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:   Adina Thorn Limited P O Box 1753 Shortland Street Auckland 1140 for the

Appellants

Short and Partners P O Box 137241 Parnell Auckland 1151 for the First and Second   Respondents   (and   on   Instructions   for   M   C   Black   for   the Fifth Respondent)

Heaney and Co P O Box 105391 Auckland City Auckland 1143 (DX CP 18503)

for the Third Respondent

Kensington  Swan  Private  Bag  92101  Victoria  Street  West  Auckland  1142 (DX CP22001) for the Fourth Respondents

Copy To:     M C Black P O Box 1984 Shortland Street Auckland 1140

[1]     The first and second appellants are appealing against a decision of the Weathertight   Homes   Tribunal   (the   Tribunal)   finding   them   responsible   for weathertight issues suffered by a dwellinghouse in Meadowbank, Auckland.   The first appellant is a registered company responsible for affixing new cladding, which was found to be defective, to the dwellinghouse; the second appellant is a director of the  first  appellant.    They  have  filed  an  application  for  leave  to  adduce  further evidence in the appeal.  The further evidence is to be found in annexures to the first and second affidavits of the second appellant, as well as the narrative in the first affidavit. The application is opposed by the respondents.

[2]      During the course of hearing the appellants’ submissions, it became clear that the further evidence that they seek to adduce in the appeal can be categorised as follows:

(a)       Evidence which the Tribunal had refused to admit before it;

(b)Evidence  that  was  available  at  the  time  of  the  relevant  Tribunal hearings (of which there were four) but, for whatever reason, no attempt was made to adduce this evidence before the Tribunal;

(c)      Evidence that was not relevant to the issues that the Tribunal was to determine and which became available either at the time of the hearings or later, and which is relevant to the determination of the appeal solely in regard to the appeal grounds alleging improper and unfair procedural conduct by the Tribunal; and

(d)Evidence that would already be before the appellate court, or which can be classified as miscellaneous.

I will deal with each category in turn.

Relevant principles

[3]      In general, appeals proceed on the basis of the evidence that was before the decision-maker at first instance and parties are not to have the opportunity to bolster

their case with new evidence on appeals.   Nonetheless, r 20.16 of the High Court Rules permits the admission of further evidence on appeal with leave of the Court if there are special reasons for doing so.  Before leave is granted, the Court must be satisfied that the further evidence is material and cogent, likely to be material and could not reasonably have been available at the time of the first hearing: a concise statement of the principles governing the exercise of the former r 716 exercise is to be found in Culverden Retirement Village Limited v McLuckie HC Auckland CIV

2007-404-000750  18  September  2007, Andrews  J.   Andrews  J  summarised  the principles at [16]:

The discretion is sparingly exercised and the presumption is that appeals will be heard on the record, as it exists.  In order to satisfy the test the evidence must be cogent and likely to be material and could not reasonably have been produced at first instance.

These principles are equally applicable to r 20.16.

[4]      At  the  same  time,  as  was  recognised  in  Comalco  NZ  Ltd  v  Television

New Zealand Ltd (1996) 10 PRNZ 573 (HC) (at 579):

… the test should not be put so high as to require the circumstances to be wholly exceptional.   Every case must be considered in relation to its own circumstances.

[5]      Complaints Committee No 1 of the Auckland District Law Society v P (2007)

18 PRNZ 760 (HC) recognises that applications to adduce further evidence should be considered in relation to their circumstances and that there may be occasions when  further  evidence  is  admitted  on  appeal,  even  though  it  was  reasonably available for the hearing of first instance (see [18]–[21]).  However, such exceptions will be rare and the further evidence would need to be cogent and material to the appeal’s resolution for this to occur.

[6]      There  are  strong  policy  reasons  in  favour  of  exercising  leave  to  adduce further  evidence  being  exercised  sparingly,  especially  when  the  decision  under appeal is from an expert body created by statute: see Rugby Union Players’ Association v Commerce Commission [1997] 3 NZLR 79 (HC), a decision in which Barker J expressed the concerns behind such reasons in the context of an appeal

against a decision of the Commerce Commission.  I consider that those concerns are equally applicable to a specialist body like the Tribunal. They are as follows:

(a)      The Court must be alert against allowing an appeal against a decision of an expert body, reached after a somewhat distinctive procedure, to be converted into a new trial on appeal;

(b)The hearing before that expert body must not be allowed to be treated as a “dummy run”; this consideration must weigh strongly against permitting further evidence that is little more than an improvement upon, or a revised version of the evidence before the expert body;

(c)      Leave will be particularly hard to obtain where the grant of leave would  in  effect  require  the  Court  to  rehear  all  relevant  expert evidence, thus resulting in a new trial before the appellate court; and

(d)An additional factor I consider important here would be the potential that any such rehearing would require further experts’ conferences and cross-examination of opposing parties’ experts.

[7]      One circumstance where leave is more readily granted is where the evidence is in the nature of updating evidence that was not available at the time of the hearing: see Rugby Union at 83.

Category A evidence

[8]      Evidence which the Tribunal refused to admit cannot be the subject of an application to adduce further evidence for the appellate court to consider in determining the merits of the substantive decision under appeal.  This is not further evidence; it is existing evidence that the Tribunal excluded.  The appellants cannot avoid  the  effect  of  the Tribunal’s  evidential  ruling  excluding  their  evidence  by subsequently applying to adduce the same excluded evidence, or a revised version of that evidence in the appeal against the Tribunal’s decision on the substantive matter. Instead, their remedy is to appeal against the Tribunal’s decision to exclude their

evidence as part of their general appeal against the outcome before the Tribunal. Accordingly, insofar as the appellants’ application to adduce further evidence seeks to avoid the Tribunal’s decision not to admit the evidence, the application is dismissed.

[9]      On the other hand, when it comes to determining the ground of appeal challenging the Tribunal’s  decision  not  to  admit  the evidence,  such evidence is relevant and should be before the court hearing the appeal.  The appellate court will need to view the evidence as part of assessing whether or not the Tribunal was right not to admit it.   The respondents did not oppose the category A evidence being before the appellate court for this purpose.  For that limited purpose only, leave is granted to adduce the evidence in category A.

[10]     This evidence is as follows:

(a)       Brief  of  evidence  of  Dr  AG  Spiers  (annexure  M  to  the  second

appellant’s first affidavit);

(b)      Affidavit of Paul Probett (annexure N to the second appellant’s first

affidavit);

(c)       Supplementary brief of evidence of Alan Light (annexure O to the

second appellant’s first affidavit);

(d)      Brief  of  evidence  of  Mark  Hazlehurst  (annexure  P to  the  second

appellant’s first affidavit);

(e)      A transcript of a meeting on 20 May 2010 and a CD Rom recording of the meeting (annexure G to the second appellant’s first affidavit); and

(f)      A letter from the Tribunal dated 10 September 2012 refusing to accept the transcript and CD Rom, being annexure G above (annexure H to the second appellant’s first affidavit).

[11]     For completeness, I record that the Tribunal’s procedural order refusing to admit the evidence in annexures M, N, O, and P is to be found in annexure 21 of the fourth respondents’ affidavit.

Category B evidence

[12]     This evidence is as follows:

(a)      A  copy  of  a  PowerPoint  presentation  compiled  by  the  second appellant  showing  a  visual  summary  of  where  the  defects  are (annexure B to the second appellant’s first affidavit); and

(b)Copy of a  report  of Scion  Research  on  the Efficacy of Brush-on Remedial Treatments on Radiata Pine Framing dated September 2012 and a copy of a similar report by Scion to the Department of Building and Housing dated June 2012 (attached as annexures I and J respectively to the second appellant’s first affidavit).

[13]     The copy of the PowerPoint presentation (annexure B) presents a number of problems.    First,  it  is  evidence  that  was  available  at  the  time  of  the  hearing. Secondly, it goes beyond evidence of fact and includes opinion evidence from the second appellant about the cause of the weathertight defects of the dwellinghouse. Whilst he may know something of the cladding system and be able to opine on whether weathertight defects stem from the cladding or not, the difficulty is that he is not an independent expert.  Instead, he is someone who has a very real stake in the outcome of the proceeding.  Thus, he is not competent to provide opinion evidence on the cause of the weathertight defects.   Thirdly, the admission of this evidence would in turn require the court to permit the relevant experts who gave evidence at the hearing the opportunity to comment on this evidence.  Cross-examination would be  required  if  the  experts  were  not  agreed.    Essentially,  the  admission  of  this evidence would result in a fresh trial before the appellate court.  I find, therefore, that the evidence in annexure B cannot be used as evidence to challenge the correctness of the Tribunal’s findings.

[14]     On the other hand, annexure B has relevance when it comes to the grounds of appeal based on procedural impropriety.  Part of the appellants’ complaint is that the Tribunal denied them the opportunity to present the PowerPoint presentation.  They say that in the middle of the cross-examination of the second appellant, the Tribunal interpolated the evidence of the group of experts.  Because the second appellant was under cross-examination, he thought he could not speak with his solicitor, and so he did not discuss with his solicitor putting the PowerPoint presentation to the group of expert witnesses.  His solicitor raised this issue with the Tribunal after the experts had given their evidence.  The appellants say that they were told they would have an opportunity to raise the matter with the experts, there was an adjournment and when the Tribunal hearing resumed, the experts had gone.   Thus, they say they were wrongly deprived of the opportunity to put the PowerPoint presentation to the expert witnesses.

[15]     There is no evidence that the appellants’ solicitor complained at the time and sought  to  have the  experts  recalled.    Nor is  there evidence that  the  appellants’ solicitor sought to have the prohibition on a witness speaking with his or her solicitor while under cross examination amended to allow for discussion about the evidence of the expert witnesses.   In principle, had the second appellant completed his evidence, he would have been present for the experts’ evidence and able to instruct his solicitor in terms of the response to be taken to that evidence.

[16]     To what extent the Tribunal, rather than the appellants’ solicitor, can be held responsible for what occurred will be an issue for the appellate court.  However, in order to develop the argument that the Tribunal has contributed to a procedural irregularity, which resulted in the appellants being deprived of the opportunity to put evidence in annexure B to the expert witnesses, the appellants want to have the subject evidence before the appellate court.  Further, in order for the appellate court to determine if there was a procedural irregularity and,  if so, whether it had a material effect on the outcome of the appeal, the court will need to assess the evidence, including its quality and whether it would have been admissible or not (given the concerns I have identified in [6] above.  For this limited purpose, I find that the evidence in annexure B can be admitted as evidence for the appeal.

[17]     The appellants seek to adduce the documents in annexures I and J on the ground that they reveal that the application of the brush-on remedial treatment (used to treat the radiata pine framing of the dwellinghouse) demands a much heavier application of this product than was actually used.  However, both documents were created over six years after the framing of the dwellinghouse was treated with brush- on remedial treatment.   The appellants have no evidence to show that what is disclosed in the documents was known at the time the framing of the dwellinghouse was treated in this way.

[18]     Any  alleged  negligence  relating  to  the  treatment  of  the  dwellinghouse’s framing has to be assessed according to the standards of the time.  Unless it can be shown that the need for a heavier application of the remedial treatment was known at the material time, (when it was applied to the dwellinghouse), this information is irrelevant.  If the information was available at the material time, the appellants would have then had to overcome the hurdle of satisfying the Court of why it should permit further evidence on appeal that was available at the time of the hearing before the Tribunal.

[19]     As there is nothing to indicate that the information in annexures I and J was known at the material time, I consider the information is irrelevant and, for this reason, I refuse leave to adduce it as evidence on the appeal.

Category C evidence

[20]     This evidence is as follows:

(a)       A  copy  of  email  correspondence  with  the  Tribunal’s  Registry

(annexure C to the second appellant’s first affidavit);

(b)Copy of an audio-recording of a discussion with one of the Tribunal members with the second appellant (annexure D to the second appellant’s first affidavit);

(c)       A copy of email wrongly sent by the Tribunal’s Registry to the second

appellant (annexure E to the second appellant’s first affidavit); and

(d)Copies of a selection of photographs from 375 photographs taken by the assessor of this claim (annexure L to the second appellant’s first affidavit).

[21]     The two emails are relied on to found an argument that the Tribunal was biased against the appellants.  The email in annexure C shows the second appellant seeking information from the Tribunal under the Official Information Act 1982.  The appellants contend that the response reveals the Tribunal being unhelpful.  The email attached as annexure E contains a derogatory reference to the second appellant.  The reference is made by a case officer of the Tribunal. The email was mistakenly sent to the second appellant; who the intended recipient was is unknown.  The appellants rely on both emails to establish a factual foundation from which the appellate court will be invited to draw the inference that the Tribunal was not dealing with the appellants in an open, fair and impartial way.

[22]     The recording that forms part of annexure D was made of a conversation between one of the members of the Tribunal and the second appellant at a time when he was representing himself.  The conversation refers to the appellants being given an opportunity to address certain issues of concern at the hearing.  They contend that the Tribunal acted improperly and unfairly by never giving them the opportunity that was promised.

[23]     The appellants want to introduce a selection of photographs from a collection of photographs taken by an assessor for the claim before the Tribunal.  The entire collection of photographs was made available to all parties, but no one introduced them into evidence.   The appellants contend that they were not aware of the photographs as they were sent by the Tribunal to the appellants’ solicitor.  They say that the Tribunal had directed that they, as well as their solicitor, would be sent commentaries.   However, the Tribunal’s direction relates to copying emails to the appellants personally.  The direction goes no further than this and the photographs were posted to the parties with an accompanying letter.

[24]     Thus, the appellants’ argument on appeal will have to address the question of whether service on their solicitor was insufficient in the circumstances.  They want to  be able to  refer the  appellate court  to  the subject  photographs  to  depict  the evidence that they were denied the opportunity of presenting to the Tribunal, though the Tribunal’s failure to  ensure the existence  of the assessor’s photographs was brought  to  the  appellants’ personal  attention.    For  the  reasons  set  out  below,  I consider the evidence in annexure C is admissible on appeal.

[25]    However, the appellants also sought leave to adduce the photographs in annexure C for the purpose of challenging the conclusion the Tribunal reached on the merits of the appeal.  This application is premature.  Until the procedural question is determined, no decision can be made on the wider use of this evidence.  I leave this for the appellate court to determine.

[26]     All the evidence in category C is relevant to grounds of the appellants’ appeal that relate to whether the Tribunal conducted itself in accordance with procedural propriety.  The evidence was not relevant to the issues before the Tribunal.  This is the  first  opportunity  the  appellants  have  had  to  adduce  this  evidence.    I  find, therefore, that each piece of evidence in this category can be adduced for the purpose I have outlined.

Category D evidence

[27]     The evidence in this category is either in the form of duplication of evidence already before the appellate court, or evidence that is irrelevant.

[28]     Annexures A and F to the second appellant’s first affidavit comprise the transcript of the evidence before the Tribunal. An order has been made by this Court for the transcript to be filed in the appeal.   The transcript of the hearing at first instance is something that would always be available for the appeal court to consider. It is unnecessary for the appellants to attempt to introduce the transcript in the form of fresh evidence.  For that reason, annexures A and F are no more than a duplication of material already before the appellate court.

[29]     There is an invoice dated 29 June 2004 which appears as annexure K to the second appellant’s first affidavit.  This document was admitted into evidence by the Tribunal.  Its inclusion in the present application is an oversight on the part of the appellants.   There is no basis for permitting duplication of evidence; it needlessly prolongs the proceeding (see s 8(1)(b) of the Evidence Act 2006).

[30]     Annexure Q is a copy of an email between the appellants and the Tribunal’s Registry, which requests information under the Official Information Act.   At the hearing, the appellants accepted that the communication was irrelevant.

[31]     Leave is refused to admit any of the evidence in category D.

Affidavit evidence of second appellant

[32]     The first affidavit of the second appellant contains narrative evidence which the appellants also seek to adduce on the appeal.   At the hearing, the appellants identified certain paragraphs of the affidavit and described how those paragraphs related to certain annexures, which I have already considered.

[33]     For the limited purposes that I will now outline, I consider that some of the narrative paragraphs in the second appellant’s first affidavit can be admitted on the appeal.

[34]     Paragraphs 11 to 16 of the first affidavit relate to the appellants’ complaint regarding the Tribunal’s alleged procedural irregularity by failing to send copies of the photographs, including those in annexure L, to the appellants personally.  Insofar as those paragraphs relate to the issue for which annexure L has been granted leave to adduce, the same applies to the paragraphs in the affidavit.

[35]     Paragraphs 17 to 32 of the second appellant’s first affidavit relate to the issues that are also covered by annexure B.  The appellants accept that if annexure B is not admitted in the appeal, the narrative evidence in paragraphs 17 to 32 has no relevance and is, therefore, not admissible.  For the limited purpose for which I have permitted annexure B to be admitted in the appeal, I consider that paragraphs 17 to

32 can also be admitted, but solely in relation to the determination of the ground of appeal alleging procedural impropriety on the part of the Tribunal.

[36]     Paragraphs 39 to 52 of the second appellant’s first affidavit are relevant for the purposes of explaining annexure D.  These paragraphs are so connected with the issue in the appeal to which annexure D relates that for the same reasons as leave has been granted of annexure D to be admitted in the appeal, so should these paragraphs.

[37]     Paragraphs 67 to 71 of the second appellant’s first affidavit deal with the refusal on the part of the Tribunal to accept the transcript of a settlement meeting.  I have already found that annexures G and H can be admitted as evidence on the appeal,  for the limited purpose set out  in [9] herein.   The same applies to the narrative in paragraphs 67 to 71 of the affidavit and, accordingly, leave is granted for this evidence to be admitted on the appeal.

[38]     The admission of the further evidence that I have allowed may require the respondents being granted the opportunity to respond to this evidence.   Leave is therefore granted to the respondents to file further evidence on appeal, but only to the extent that such evidence responds directly to the permitted scope of the appellants’ evidence.  (There is to be a telephone conference at a time to be arranged by the Registry for the purpose of making timetabling directions for the filing and service of the further evidence).

Result

[39]     For the limited purposes specified herein, leave is granted for the following evidence to be adduced on the appeal:

(a)       Annexures G, H, M, N, O, P and paragraphs 67 to 71 of the second

appellant’s first affidavit, for the limited purpose set out in [9] herein;

(b)      Annexure B and paragraphs 17 to 32 of the second appellant’s first

affidavit, for the limited purpose set out in [16] herein; and

(c)      Annexures C, D, E and L and paragraphs 11 to 16 and 39 to 52 of the second appellant’s first affidavit, for the limited purpose set out in [26] herein.

[40]     Leave is reserved to the parties to seek an award of costs.

[41]     I note that the appellant has only been partially successful in the application, which is a consideration relevant to an award of costs.

[42]     The Registry is to arrange a telephone conference at a time convenient to all counsel, for the purpose of making timetable directions for the respondents to file any evidence in response to the further evidence that the appellant has been granted leave to adduce.

Duffy J