Kawarau Village Holdings Ltd v Yuen
[2015] NZHC 1379
•18 June 2015
IN THE HIGH COURTOF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-590 [2015] NZHC 1379
BETWEEN KAWARAU VILLAGE HOLDINGS
LIMITED Plaintiff
AND
DAVID YUEN SING CHI Defendant
Hearing: 3 March 2015 Appearances:
M G Colson and T B Fitzgerald for the Plaintiff
B D Gray QC and S D Williams for the DefendantJudgment:
18 June 2015
JUDGMENT OF ASSOCIATE JUDGE R M BELL
This judgment was delivered by me on 18 June 2015 at 4:00pm
Pursuant to Rule 11.5 of the High Court Rules
………………………………………….
Registrar/Deputy Registrar
Solicitors:
Bell Gully (M G Colson/T B Fitzgerald) Auckland, for the Plaintiff
Lee Salmon Long (J Long) Auckland, for Defendant
Counsel:
B D Gray QC and S D Williams, Auckland, for Defendant
KAWARAU VILLAGE HOLDINGS LIMITED v DAVID YUEN SING CHI [2015] NZHC 1379 [18 June 2015]
[1] The plaintiff, Kawarau Village Holdings Limited, applies for further particulars of paragraph 113 of the statement of defence. The defendant, Mr Yuen, applies for directions as to tailored discovery.
What the case is about
[2] It is not necessary to review the pleadings in their entirety. Only a bare outline is required.
[3] The case arises out of an ambitious property development at Kawarau Falls Station near Queenstown. The man behind the development was Mr Nigel McKenna. He planned a world-class destination resort. The development was to provide 13 hotel and serviced apartment complexes, restaurants, cafés, bars, shops and associated infrastructure and amenities, including landscaped open spaces for common use. Stage 1 of the development included two buildings, Lakeside West and Kingston West. Lakeside West was to be a luxury residential apartment complex. Kingston West was to be serviced apartments operated as a four star hotel. Mr McKenna formed development companies for each building, Peninsula Road Limited (for Kingston West) and Kingston Road Limited (for Lakeside West).
[4] Mr McKenna had used Mr Yuen, based in Singapore, to market previous projects to potential investors in South-East Asia. For Kawarau Falls, Mr Yuen was to market Lakeside West and Kingston West. In 2006 a company associated with Mr Yuen entered into separate marketing and underwrite agreements, one with Peninsula Road Limited and another with Kingston Road Limited. I will call Mr Yuen’s company Austpac, (short for Austpac Investment Consultancy Limited). Mr Yuen says that the correct company was Austral Pacific Investment (H.K.)
Limited. For this decision I am not required to decide between the two.1 Under
1Austpac was also to market and underwrite the sale of units in three other buildings, but those agreements are not relevant to this proceeding.
each agreement Austpac agreed to underwrite, market and sell units for each building. Each development company had the option to require Austpac to purchase any unsold units upon giving a call notice. Mr Yuen guaranteed Austpac’s performance.
[5] In 2007 Kingston Road Ltd and Peninsula Road Ltd were amalgamated under Part 13 of the Companies Act 1993, with Peninsula Road Ltd being the merged company. In the same year it assigned its interests under the underwrite agreements to Melview (Kawarau Falls Station) Investments Ltd.
[6] Between 2006 and 2010 Austpac arranged for the sale of units in the Kingston West and Lakeside West buildings. In 2010 Melview (Kawarau Falls Station) Investments Ltd assigned its interest under the underwrite agreements to the plaintiff, Kawarau Village Holdings Ltd. In 2011 Kawarau Village Holdings Ltd served settlement notices on purchasers introduced by Austpac. Those purchasers failed to settle. Melview (Kawarau Falls Station) Investments Ltd and Kawarau Village Holdings Ltd served a call notice on Austpac under the underwrite agreements. Kawarau Village Holdings Ltd required Austpac to buy those units where purchasers had defaulted. Austpac did not settle. Kawarau Village Holdings Ltd cancelled the agreements to sell the units to Austpac because of the failure to settle. Kawarau Village Holdings Ltd sues Mr Yuen under his guarantee of the underwrite agreements. It brings a damages claim based on the value of the units at the date of settlement. The statement of claim seeks judgment for $56 million.
[7] In defence, Mr Yuen denies that he was given notice of any assignments. For affirmative defences, he alleges that the contractual arrangements, not only the underwrite agreements but also a heads of agreement, were subject to a number of terms: a prejudicial acts term, an entire development term, a vendor finance implied term, and a quality of specification implied term. His case is that the development went awry with the corporate restructuring in 2007. This was when the ownership of the properties was split, with the Lakeside West and Kingston West sites owned by one entity, Peninsula Road Limited, and Melview (Kawarau Falls Station) Developments Ltd owning other parts (for Stages 2 and 3). New agreements for the sale of investments units were introduced. The quality of the construction of the
Lakeside and Kingston buildings was downgraded. A financier put Melview (Kawarau Falls Station) Developments Ltd and Melview (Kawarau Falls Station) Investments Ltd into receivership in 2009. Construction work on the land for stages
2 and 3 stopped. Agreements to sell units in the stage 2 and 3 complexes were cancelled. There was no longer going to be a co-ordinated development of the original project. There was litigation between Peninsula Road Limited on the one side and Melview (Kawarau Falls Station) Developments Ltd and Melview (Kawarau Falls Station) Investments Ltd on the other, over development of stages 2 and 3. Effectively those stages were abandoned. In 2010 another financier put Peninsula Road Limited into receivership. Mr Yuen pleads various alleged prejudicial acts on the part of Melview (Kawarau Falls Station) Investments Ltd which are said to have prevented Austpac from signing further purchasers, and to have increased the risk to Austpac that purchasers would not complete. He gave notice of cancellation in February 2010. A proposed settlement package for the purchasers was discussed but eventually, in 2011, Melview (Kawarau Falls Station) Investments Ltd’s financier would not support it. In 2014 the land for stages 2 and 3 was sold for residential development. Mr Yuen alleges frustration of the underwrite agreements, and their cancellation by Austpac for repudiation by Melview (Kawarau Falls Station) Investments Ltd. He alleges that it cancelled for breaches - or anticipatory breaches - of the prejudicial acts term, the entire development term, the vendor finance term and the quality of specification term.
[8] In Sun v Peninsula Road Ltd, various purchasers sued Peninsula Road Ltd, Kawarau Village Holdings Ltd and others for return of their deposits.2 Some of the issues raised by the purchasers overlap those raised by Mr Yuen. The purchasers failed in their claim and the developers succeeded in their counterclaims.
Application for further particulars
[9] The issue here is timing. Mr Yuen accepts that the plaintiff is entitled to the particulars it seeks but says that he should not have to give them until after
discovery. The plaintiff, on the other hand, says that it is entitled to the particulars
2 Sun v Peninsula Road Ltd (in liq and in rec) [2015] NZHC 126.
now, and that the particulars will reduce the scope of discovery it is required to provide.
[10] The plaintiff seeks further and better particulars of alleged downgrades in the quality of materials and finish under paragraph 113(b)(i) of the statement of defence. There is no issue with the rest of the paragraph. The relevant pleading says:
Over the course of construction of Lakeside West and Kingston West PRL and MFKSI made significant downgrades to the quality of materials and finish for Lakeside West and Kingston West provided for in the Draft Outlines and Specifications pleaded at paragraph 86 above.
Particulars
…
(b) Significant downgrades to the quality of materials and finish in the
Lakeside West building included:
(i) Building-wide downgrades in the quality of material and finishes to be particularised following discovery.
[11] To put paragraph 113 into context, the allegations go to Mr Yuen’s affirmative defences that the downgrades to the quality of materials and finish in Lakeside West and Kingston West were in breach of the prejudicial acts and quality of specifications terms of the underwrite agreements. These breaches allegedly prejudiced Austral in its marketing and underwrite applications by making it more likely that purchasers would fail to settle, hampering its efforts to sign on additional purchasers. They justified Austpac’s cancellation of the underwrite agreements.
[12] Kawarau Village Holdings Ltd argues that if it is alleged to have downgraded materials and finish, it is entitled to know what those downgrades are. It cannot give an informed answer to an unparticularised allegation. In response, Mr Yuen says that the plaintiff already knows what downgrades it made to materials and finish whereas he, based in Singapore throughout, cannot.
[13] There is a line of cases that recognises that parties may not be required to give particulars before discovery where the party seeking particulars is the only one
with the information on which the other party could rely. In Sachs v Speilman, North J said:3
… it is suggested by the notice of motion that the Defendants are embarrassed by the form in which this pleading is framed. But how can it be said that the Defendants are embarrassed by not knowing these details? The Plaintiff has told them in his statement of claim that he has not the means of giving these details. They, on the other hand, are the persons who carried through the transactions, and have in their possession the books containing the full accounts; therefore they have full knowledge and means of knowledge, and can shew precisely what the cases are, if any, in which they did do what the statement of claim alleges they did. I do not see how they can possibly be embarrassed by not obtaining from the Plaintiff the information they have in their own possession. Of course I can see well enough why they press for these particulars. If the Plaintiff were obliged to condescend upon particulars, and to specify the instances in which the Defendants have done what he charges them with, the result might be that from his imperfect knowledge he would not be able to point out in the particulars some cases in which they had actually done what he says they have done; and inasmuch as, after particulars were given, their defence would be addressed only to those points, the ignorance of the Plaintiff might relieve the Defendants from being held responsible as to certain matters with respect to which they are open to the charge contained in the statement of claim.
[14] Edwards J followed that reasoning in Hickson v Scales.4 In Truck Master Ltd v Mastagard Waste Ltd, Associate Judge Osborne said:5
In some circumstances, particulars can neither be reasonably expected nor appropriately sought by order from a plaintiff. The cases recognise that the usual expectation as to detailed particulars of a claim will give way in cases where the party which would be entitled to particulars has knowledge concerning those particulars which the other party does not have. This is an approach to the requirements of pleading recognised in both England and in New Zealand. The Courts recognise as adequate a pleading which pleads all material particulars other than those which can be derived only from information within the particular knowledge or control of the defendant.
[15] Kawarau Village Holdings Ltd says that if it were required to make discovery ahead of Mr Yuen providing particulars, it would need to go through masses of documents relating to the plans and specifications to see whether any of them departed from the draft outline plans and specifications on which Mr Yuen relies. Instead it has offered Mr Yuen, or any agent appointed by him, access to the entire
development to inspect and identify all potential downgrades in material and finish.
3 Sachs v Speilman (1887) 37 Ch D 295 (Ch) at 303.
4 Hickson v Scales (1901) 19 NZLR 202 (SC).
5 Truck Master v Mastagard Waste Ltd [2014] NZHC 1676 at [15] (footnotes omitted).
[16] That is an appropriate and principled way to deal with the matter. Mr Yuen can compare the draft plans and specifications against the Kingston West and Lakeside West buildings as built. Apparently he already has access to local authority records, including applications for resource consent and building consents. Mr Yuen had a representative on site, a Mr Smith, who has already provided him with some information. For any downgrades in materials and finish to be actionable, they need to be discoverable. Mr Yuen’s defence is that the downgrades made the development less attractive to purchasers. Downgrades that could not be detected on inspection are not relevant.
[17] In these circumstances, Mr Yuen should have the opportunity to instruct an appropriate agent to inspect the Lakeside West and Kingston West buildings for any downgrades in materials and finish. That will enable him to provide the particulars sought by Kawarau Village Holdings Ltd. I fix the time for him to provide those particulars at eight weeks from the date of this decision. This period will allow him to instruct an appropriate expert witness to inspect and report. I reserve leave to Mr Yuen to apply for extensions of time if he cannot provide particulars in time because of practical difficulties in carrying out an inspection.
The discovery application
[18] The parties agree that tailored discovery is required. In his 19 December
2014 application, Mr Yuen sought discovery of 25 classes of documents. The parties have reached agreement on many of them. The categories still requiring decision are
11, 13, 14, 15 and 24.
Category 11
[19] Mr Yuen seeks discovery of:
Documents and correspondence in relation to the standard form sale and purchase agreements provided by Melview or its successors, including documents and correspondence relating to changes made to those agreements by or on behalf of Melview, Melview (Kawarau Falls Station) Investments Ltd or Kawarau Village Holdings Ltd.
[20] In opposition, Kawarau Village Holdings Ltd says that the category is too broad. While it consents to discovery of correspondence between the parties, it says that internal correspondence concerning changes to the sale and purchase agreements is irrelevant.
[21] While standard form agreements for sale and purchase were established at the outset, over time they were replaced with other agreements. Mr Yuen’s case is that the changes were significant and relevant to his defences based on alleged breaches of the prejudicial acts term, the quality of specification term, and his right to cancel the underwrite agreements. His advisors have identified certain changes already, such as the introduction of a precinct fee of one per cent per value of the unit at settlement. While Kawarau Village Holdings Ltd accepts that, because of Mr Yuen’s pleaded defences, it is required to disclose changes to the agreement for sale and purchase, it contends that its internal documents relating to those changes cannot be relevant.
[22] Mr Yuen understands that at the hearing Kawarau Village Holdings Ltd will contend that any changes to the agreement for sale and purchase were insignificant or insubstantial. Because the case will require an evaluation of the extent and effects of changes to the standard agreements, the plaintiff’s internal documents dealing with those changes are relevant in so far as they identify changes and record reasons for them. For example, a document with an evaluation of the changes ought to be disclosed as relevant to assessing the significance or otherwise of the changes.
[23] Kawarau Village Holdings Ltd will need to go through all documents relating to changes to the agreements for sale and purchase. From those, it will have to select those that are relevant to the issues in this case, especially the significance or otherwise of the changes. It will need to apply the “adverse documents” test under r 8.7 of the High Court Rules to decide whether a document should be included in discovery. In assessing whether a document may support Mr Yuen’s case, it should take a wide rather than a narrow view. It should consider whether the document or the information in the document is capable of being used in evidence. It is not required to disclose documents under a “train of enquiry” relevance test. As with any party making discovery, it must apply that test in good faith.
[24] Kawarau Village Holdings Ltd is accordingly required to disclose all documents within Category 11, even if they are internal documents, so long as it follows the test in paragraph [23].
Category 13
[25] Mr Yuen proposes disclosure of these documents:
Documents and correspondence relating to the assignment of PRL and KRL’s position under the marketing and underwrite agreements to Melview (Kawarau Falls Station) Investments Ltd and the plaintiffs, including documents and correspondence relating to the assignor’s notification of those assignments to Austral and the defendant.
[26] In opposition, Kawarau Village Holdings Ltd says that this category is too narrow as it excludes documents relating to Austpac’s and Mr Yuen’s knowledge of the assignment. It also seeks disclosure of documents relating to the assignment by Melview (Kawarau Falls Station) Investments Ltd to Kawarau Village Holdings.
[27] There are two assignments:
(a) the assignment in late 2007 by Peninsula Road Ltd to Melview (Kawarau Falls Station) Investments Ltd of its interests under the underwrite agreements, and
(b)the assignment in October 2010 by Melview (Kawarau Falls Station) Investments Ltd of its interests under the underwrite agreements to Kawarau Village Holdings Ltd.
[28] Kawarau Village Holdings Ltd has pleaded legal assignments in both cases. It has not relied on equity to say that it is entitled to rely on the rights of assignors to sue Mr Yuen and it has not joined parties necessary for such a claim in equity. The
2007 assignment is governed by s 130 of the Property Law Act 1952. The 2010 assignment is governed by Part 2 subpart 5 of the Property Law Act 2007. The Property Law Act 2007 came into effect on 1 January 2008, but does not apply to
assignments of things in action before that date.6 The 1952 and 2007 Acts differ as to the significance of notice of an assignment to a debtor. Under the 1952 Act, it was a requirement of a statutory assignment that the debtor be given express notice in writing:
130 Assignment of debts and things in action
(1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal or equitable thing in action, of which express notice in writing has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim that debt or thing in action, shall be and be deemed to have been effectual in law (subject to all equities that would have been entitled to priority over the right of the assignee if this Act had not been passed) to pass and transfer the legal or equitable right to that debt or thing in action from the date of the notice, and all legal or equitable and other remedies for the same, and the power to give a good discharge for the same, without the concurrence of the assignor.
(Emphasis added)
[29] Under the 2007 Act there is no longer a requirement for notice in writing to the debtor.7 The absence of notice to the debtor does not affect the validity of the assignment, but may be relevant under s 51:
51 Further consequences of assignment of thing in action
(1) This section applies to a thing in action assigned in accordance with section 50(1) or in equity.
(2) Payment of all or part of the debt to the assignor by a debtor who does not have actual notice of the assignment discharges the debtor to the extent of the payment.
(3) The debt owing by a debtor who has actual notice of the assignment
is payable to the assignee.
(4) However, the debt is payable to another assignee if,—
(a) before discharge, the debtor receives actual notice of the assignment of the same thing in action to the other assignee; and
(b) the rights of the other assignee in relation to the thing in action have priority over the rights of the first assignee.
6 Property Law Act 2007, s 367(3)(b).
7 Property Law Act 2007, s 50.
(5) A debtor may interplead in any proceeding brought against the debtor for the payment of the debt, or apply to a court for an order determining the entitlement to any right in relation to a thing in action, if the debtor has actual notice—
(a) that an assignment of the thing in action is disputed by the assignee or anyone claiming under the assignor; or
(b) that there are other opposing or conflicting claims in relation to the thing in action.
(Emphasis added)
[30] Mr Yuen has not pleaded any of the circumstances under s 51 of the Property Law Act 2007. While he has denied that he was notified of the second assignment, the absence of actual notice before he was served with this proceeding does not give him a defence. Having been served with a pleading which informs him of the second assignment, he now has actual knowledge. Accordingly, requiring him to disclose documents bearing on his or his company’s knowledge of the second assignment will not serve any useful purpose because they are not relevant.
[31] On the other hand, for the first assignment, Kawarau Village Holdings Ltd will need to prove that it gave express notice of the assignment in writing to Austpac. The underwrite agreements provided addresses for service of notices to be given to its parties. Service could be by facsimile. At this stage Mr Yuen has put the plaintiff to proof that it gave written notice of the 2007 assignment to Austpac. I know no more about the facts on that matter. Presumably Kawarau Village Holdings Ltd may give evidence that notice was given under the notice provision in the underwrite agreements. Documents in the control of Mr Yuen showing his knowledge of the assignment may go to prove that Austpac was given notice. On that basis, documents concerning the knowledge of Austpac and Mr Yuen are relevant and discoverable.
[32] Accordingly, category 13 is extended to cover documents and correspondence relating to Austpac’s and Mr Yuen’s knowledge of the 2007 assignment, but not their knowledge of the 2010 assignment.
Category 14
[33] Mr Yuen proposes:
Documents relevant to Melview (Kawarau Falls Station) Investments Ltd’s decision to proceed with only the first stage of the Kawarau Falls Station Development, including any documents or correspondence relating to the impact of that decision on the value of Stage 1 units and carparks, the settlement of existing Sale and Purchase Agreements for Stage 1 units and carparks, and the saleability of unsold Stage 1 units and carparks.
[34] His proposal is directed at disclosure of the plaintiff’s decision-making documents. Kawarau Village Holdings Ltd proposes that the category be limited to “any major or significant documents” concerning the decision to proceed only with the first stage of the Kawarau Falls Station development. It advised that decision- making documents under this head had been disclosed in Sun v Peninsula Road Development Ltd,8 but preliminary documents had not been disclosed. It was confident that Mr Yuen was likely to be satisfied. His counsel did not demur. I record that position, but reserve leave for Mr Yuen to apply for further directions –
for example, under rr 8.17 and 8.19 – if necessary.
Category 15(a)-(g)
[35] Mr Yuen seeks disclosure of:
15. Documents and correspondence in relation to the anticipated breach or breaches of the quality of the specifications or implied terms in the alleged “prejudicial acts” pleaded at paragraph 126 of the statement of claim, including documents and correspondence relating to:
(a) decisions to modify or for modifications of the plans or specifications for the Kingston West and Lakeside West buildings;
(b) correspondence with the project engineer in relation to modifications to or compliance with the plans or design specifications for Kingston West and Lakeside West buildings and their surrounds;
(c) correspondence with the Queenstown Lakes District Council in relation to modifications to or compliance with the plans or design specifications for the Kingston West and Lakeside West buildings and their surrounds; and
(d) decisions to modify and/or the modification of the quality of materials and finish in the Kingston West and Lakeside West buildings, including correspondence with the Project Engineer and the Queenstown Lakes District Council in relation to the same;
(e) decisions to vary and/or the variation of the terms of the Operator lease on the Kingston West hotel units including (but not limited to) variations particularised in paragraphs 1-6(v) A-C;
(f) decisions to transfer or the transfer of common property (as designated in the plans and specifications annexed to and forming part of the marketing and underwrite agreements and agreements for sale and purchase) into private title and converting them to commercial and retail uses; and
(g) the allegation that the “prejudicial acts” pleaded in paragraph 26 of the statement of claim precluded Austral from successfully assigning additional substitute purchasers as pleaded in paragraphs 1-8(a) of the statement of claim.
Category 15(h) was not the subject of argument and is not contentious.
Sub-paragraphs 15(a)-(d)
[36] Kawarau Village Holdings Ltd argued that the documents were relevant and disclosure would be disproportionate. In its submission, the discovery would be enormously wide and the documents disclosed would have marginal relevance. My ruling on particulars has addressed that. Kawarau Village Holdings Ltd will be required to disclose documents within category 15(a)-(d) relevant only to the downgrades in materials and finish identified by Mr Yuen in paragraph 113 of his statement of defence, including any particulars he gives. For those particularised allegations of downgrades in materials and finish, Kawarau Village Holdings Ltd will be required to make discovery under 15(a)-(d). That will include decision- making documents: they are relevant as going to the significance of any changes made.
[37] Kawarau Village Holdings Ltd also objected that there was no contractual term as to “quality of specifications”, there was no evidential basis for that term, and it had not been the subject of any claim by the purchasers in Sun v Peninsula Road Ltd.9
[38] In determining relevance, it is the case of the party seeking discovery that must be assumed to be true, not that of the party from whom discovery is sought.10 I have not heard full argument on the interpretation of the contractual documents. I doubt that any pre-trial findings as to contractual terms would be possible, given that any interpretation will turn on context, which is likely to be the subject of considerable and possibly contested evidence. I assume that Mr Yuen has an
arguable case for a term concerning quality of specifications. There is nothing to suggest that Mr Yuen’s contention can be dismissed out of hand.
Category 15(e)-(f)
[39] Categories 15 (e) and (f) go to variations to the terms of the operator lease of the Kingston West hotel units, decisions to transfer common property (as shown in plans and specifications) into private title, and converting that common property to commercial and retail uses.
[40] While Kawarau Village Holdings Ltd is willing to disclose documents that demonstrate that changes were made to the operator lease and common property, it resists internal documents, that is, documents that have not become public and did not pass between the parties.
[41] I accept the submission for Mr Yuen that decision-making documents are relevant. Kawarau Village Holdings Ltd argues that decision-makers’ subjective views of the significance of changes cannot be relevant to the court’s consideration. On the contrary, if documents show that decision-makers appreciated that reducing common areas and increasing margins for hotel operators would have material effects on purchasers, and also on holding Austral to the underwrite agreements, they are relevant to showing that they did in fact have that effect.
[42] I accordingly direct discovery on categories 15(e) and (f) as sought by
Mr Yuen.
10 Edward Bray The Principles and Practice of Discovery (Reeves & Turner, London, 1885) at 18.
For a more recent authority, see Paul Matthews and Hodge M Malek Disclosure (4th ed, Seet & Maxwell, London, 2012) at [5.09].
Category 15(g)
[43] Kawarau Village Holdings Ltd sought to expand category 15(g) to include documents demonstrating Austral’s attempts to sign additional purchasers after alleged prejudicial acts. Initially Mr Yuen resisted disclosure, but during the hearing it was agreed that discovery should be made on the plaintiffs’ terms rather than Mr Yuen’s formulation of category 15(g).
Category 24
[44] Category 24 says:
Documents and correspondence relating to the plaintiffs’ loss, including valuations, documents evidencing sums received from substitute purchasers and documents relating to the holding costs of the units in Kingston West and Lakeside West.
[45] Kawarau Village Holdings Ltd objected to the requirement to disclose documents relating to holding costs. Its case is that it is claiming its damages on the basis of loss of value as at date of cancellation, and holding costs do not form part of those damages. With that intimation, Mr Yuen accepted that documents relating to holding costs were not discoverable.
Outcome
[46] I make the following orders:
(a) On the plaintiff’s discovery application:
(i)Mr Yuen and any agent instructed by him may enter on and inspect the Lakeside West and Kingston West buildings for discoverable downgrades in materials and finish.
(ii)Mr Yuen is to give particulars of the significant downgrades in the quality of materials and finish alleged in paragraph
113(b)(i) of the statement of defence no later than 14 August
2015.
(iii)Leave is reserved to apply for further directions (but that is not to stand in the way of the parties agreeing to adjusted directions).
(b) On Mr Yuen’s discovery application:
(i)For category 11, the plaintiff is to disclose documents within the category, even if they are internal decision-making documents, but will apply the adverse documents test in assessing relevance.
(ii)For category 13, Mr Yuen is to disclose documents within the category, including documents and correspondence relating to the notification of the 2007 assignment to Austpac and Mr Yuen and their knowledge of the assignment, but he is not required to disclose documents relating to the 2010 assignment.
(iii)For category 14, the plaintiff is to disclose any major or significant documents concerning any decision whether or when to build stages 1, 2 and 3 of the Kawarau Falls development, including any documents or correspondence relating to the impact of any such decision on the value of stage 1 units and car parks, the settlement of existing sale and purchase agreements for stage 1 units and car parks, and the saleability of unsold stage 1 units and car parks. Leave is reserved to Mr Yuen to apply for further orders, if required.
(iv)For categories 15(a)-(d), the plaintiff is to disclose documents within the categories, but limited to those changes to plans and specifications for which Mr Yuen has given particulars. Disclosure may be staged according to Mr Yuen’s progress in giving further particulars of paragraph 113(b) of the statement of defence.
(v)For categories 15(e) and (f), the plaintiff is to make disclosure in terms of the application.
(vi)For category 15(g), in addition Mr Yuen is to include documents demonstrating Austpac’s attempts to sign additional purchasers after 16 December 2011.
(vii)For category 24, the plaintiff is not required to disclose documents relating to its holding costs.
(c) These directions for tailored discovery do not relieve the parties from disclosing under r 8.18 of the High Court Rules documents under the adverse documents test which they become aware of but which are not required to be discovered under this decision.
(d) I reserve leave generally to apply for further directions.
(e) I allocate a telephone case management conference for Tuesday,
30 June 2015 at 9:00am to give any immediate timetabling directions, for example, to fix dates for affidavits of documents to be filed and served. If the parties can agree directions, the conference will be vacated.
[47] I invite the parties to confer as to costs. If they cannot agree, memoranda may be filed. The party filing second is to do so within 10 working days of the other.
………………………………………..
Associate Judge Bell