Kitchen v AA Insurance Limited

[2019] NZHC 348

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000233

[2019] NZHC 348

BETWEEN

LEWIS QUINN KITCHEN AND SHARYN JANE KITCHEN
Plaintiffs

AND

AA INSURANCE LIMITED

Defendant

Hearing:	26 February 2019
Appearances:	T J Brown and M J Chrisp for Plaintiffs A R Durrant for Defendant
Judgment:	7 March 2019

JUDGMENT OF GENDALL J

Introduction

[1]    This proceeding has sprung out of events which followed the Canterbury earthquake sequence which commenced in 2010 and 2011. The plaintiffs are the owners of a residential property which is their family home at 76 Rocking Horse Road, Christchurch (the property). The property has been identified as being in a Flood Management Area under the Christchurch City Council’s District Plan.

[2]    The property was insured with the defendant under a policy covering the home and its contents.   The home was insured on a replacement basis for an area of     229 square metres with an addition for outbuildings, decks and communal areas.

[3]    The home and its contents were damaged in the Canterbury earthquake sequence and the plaintiffs lodged claims with the Earthquake Commission (EQC) and the defendant.

KITCHEN v AA INSURANCE LIMITED [2019] NZHC 348 [7 March 2019]

[4]    Matters relating to the substantive insurance claim have not been able to be resolved between the plaintiffs and the defendant and this proceeding was issued on 19 April 2018.

[5]As to background matters relating to this claim, the plaintiffs contend:

(a)As a result of earthquake damage the cladding on the dwelling comprising their home needs to be replaced (the repair work).

(b)That repair work is properly covered under the plaintiffs’ insurance policy with the defendant.

(c)The insurance policy specifically provides:

We [the defendant] cover you…for physical loss or damage to the building.

We agree to repair, rebuild or replace the buildings on the existing site in the same or similar construction or style as new, using the floor area as stated in your policy schedule as the basis of settlement…

and:

How we may settle a claim:

At our option we may:

-     replace an old item with a new item (regardless of brand) which is available in New Zealand and in our opinion is the nearest equivalent and priced item at the date of loss. We may obtain the item from our supplier, or

-     rebuild or repair the property as new (including the additional cost necessary to comply with statutes, regulations and local government bylaws).

(d)A building consent is required for the repair work.

(e)The Christchurch City Council has advised that:

(a)    Their LIDAR information indicates the average ground elevation at the property is approximately 10.76 metres ranging between

10.53 metres and 11.00 metres.

(b)    The required Finished Floor Level (FFL) for the property for compliance with clause E1 of the Building Code is 11.81 metres (Building Code FFL).

(c)    The minimum FFL of the dwelling must meet the Building Code FFL in order for:

(i)The repair work to comply with the Building Act 2004 and the Building Code, particularly clause B2 Durability of the Building Code; and

(ii)The Christchurch City Council to grant a building consent for the repair work.

(d)    The property is within a District Plan Fixed Minimum Floor Level Overlay within the Flood Management Area, particularly the High Flood Hazard Management Area.

(e)    Under Chapter 5.4 (Flood Hazard Rules) of the District Plan, properties located within the Flood Management Area require a minimum FFL and resource consent is required if the FFL is not met.

(f)     Here the minimum FFL for compliance with Chapter 5.4 of the District Plan it is said is 12.36 metres.

(g)    Under Rule 5.4.6.1 of the District Plan, properties located within the High Flood Management Area do not need to comply with section 5.4 (Flood Hazard Rules) if the activity in question involves the replacement or repair of a building provided:

(i)The ground floor area of the replaced or repaired building is not greater than the ground floor area of the existing building.

(ii)The replaced or repaired building is located in a position on the site that is no lower than the existing building.

(h)    Under Rule 5.4.1.3 of the District Plan, if the dwelling at the property is lifted to meet the District Plan FFL, the applicable daylight recession plane in residential zones shall be determined as if the ground level at the relevant boundary was the minimum floor level set in the activity specific standards in Rule 5.4.1.1, or natural ground level, whichever is higher.

[6]    This issue over the minimum FFL for the dwelling now, it is said, would mean the floor of the dwelling would need to be raised which would be likely to lead to the foundations needing to be replaced.

[7] The Christchurch City Council has previously advised the parties, however, that it is willing to grant a waiver under s 67 of the Building Act 2004 in respect of the requirement for the repair work to comply with these Flood Hazard Rules, thereby enabling the Council to grant a building consent for the repair work without the property meeting the Building Code FFL. This, however, was subject to the plaintiffs acknowledging in writing that the repair work would not meet the requirements of

cl B2 of the Building Code, and it would not be guaranteed to be durable for 15 years while immersed in sea flood waters.

[8] In response, the plaintiffs have advised that they are not prepared to provide this written acknowledgement and the Christchurch Council is yet to provide a waiver from the repair work under s 67 of the Building Act 2004 or to grant a building consent for the repair work.

Separate question application

[9]On 18 January 2019 the plaintiffs applied to this Court for an order under r

10.15   High Court Rules contending that a hearing should be held to determine two preliminary questions relating essentially to this Christchurch City Council waiver issue. Those questions are:

(a)Can the defendant rely on a waiver of the requirement to comply with the Building Code issued by a territorial authority under s 67 of the Building Act 2004, prior to the granting of a building consent, in order to meet its obligation under the policy to “rebuild or repair the property as new (including the additional cost necessary to comply with statutes, regulations and local government bylaws).”

(b)Will the defendant meet its obligation to the plaintiffs under the policy to “rebuild or repair the property as new (including the additional cost necessary to comply with statutes, regulations and local government bylaws)” where:

(a) The territorial authority’s view is that the work proposed by the defendant to repair the earthquake damage to the property will not comply with the Building Act and/or the Building Code because the relevant work will not comply with clause B2 Durability of the Building Code;

(b) The territorial authority has indicated that it would be prepared to grant a waiver of the requirement to comply with clause B2 Durability of the Building Code under s 67 of the Building Act 2004 so that it may grant a building consent for the relevant works if the plaintiffs sign a statement acknowledging:

(i)They are aware that the new cladding will be subject to inundation to a level of 11.81 metres;

(ii)The cladding is not guaranteed to be durable for 15 years while being subject to immersion and flood waters;

(iii)The new cladding is a direct replacement for the existing cladding that is similar;

(iv)In a 50 year flood event with predicted flood levels of

11.41 metres plus wind/wave action etc of up to 11.81 metres, the existing house (to which no works are proposed under the consent) will be subject to significant flood damage and therefore any damage to the replacement cladding will be a small consideration in the overall scenario; and

(v)They wish to have the requirements of B2 waived based on these considerations.

(The Statement)

And:

(c)As a result of the plaintiffs refusing to sign the Statement the territorial authority has refused to grant a waiver and a building consent for the relevant works?

[10]   The grounds on which the plaintiffs rely in seeking this order under r 10.15 are specified in the application as follows:

(a)The questions to be determined are questions of law that are capable of being easily demarcated from the remaining issues left to be determined at any subsequent trial.

(b)As the questions to be determined are capable of being easily demarcated from the remaining issues left to be determined at any subsequent trial:

(a)    No difficulties of issue estoppel arise;

(b)    There is unlikely to be any duplication of time involved in the Court or counsel preparing for any subsequent trial.

(c)Any facts required to be put before the Court in order for it to determine the questions are unlikely to be contentious.

(d)To the extent that any viva voce evidence is required, it:

(a)    Is likely to be minimal;

(b)    Will involve witnesses based locally; and

(c)    Those witnesses will either not be required to give evidence at any subsequent trial, or any evidence given by those witnesses at a subsequent trial will be in relation to different issues and, therefore, there will not be any duplication.

(e)The determination of the questions will either resolve the matters at issue between the parties or significantly narrow the matters at issue between the parties.

(f)In the event a subsequent trial is still required, the determination of the questions will reduce the time of that trial, the evidence required, particularly expert evidence, and the associated cost to the parties.

(g)There is no significant overlap in the evidence required to determine the questions and the evidence required in respect of the remaining issues to be determined at any subsequent trial.

(h)There will be no impact on discovery as this has already taken place.

(i)There is a wider public interest in determining the questions which may benefit other insurance claims both before the Court or otherwise.

(j)A separate question hearing is unlikely to cause any significant delay in finally resolving the proceeding because:

(a)    As noted above, the determination of the questions:

(i)Has the potential to either resolve the matters at issue between the parties or to significantly narrow the matters at issue; and

(ii)Will reduce the amount of evidence required at any subsequent trial; and

(b)    Less hearing time will be required for the determination of the questions compared to a full trial and, therefore, it is likely the Court will be able to allocate a hearing time at a time earlier than it would for a trial of all matters at issue.

(k)There is no requirement that the Judge who determines a separate question hearing must also hear the substantive trial.

[11]   The plaintiffs’ Application seeking a Separate Question Hearing was opposed by the defendant in a Notice of Opposition filed on 12 February 2019.

The preliminary question process

[12]   The jurisdiction of the Court to make the separate question orders sought by the plaintiffs here derives from r 10.15 of the High Court Rules:

10.15Orders for decision

The court may, whether or not the decision will dispose of the proceeding, make orders for—

(a)the decision of any question separately from any other question, before, at, or after any trial or further trial in the proceeding; and

(b)the formulation of the question for decision and, if thought necessary, the statement of a case.

[13]   In addressing the purpose of this preliminary question procedure, McGechan on Procedure notes:1

HR10.15.01     Purpose

As stated by Eichelbaum J in Innes v Ewing (1986) 4 PRNZ 10 (HC) at 18:

“[C]learly the underlying purpose is to expedite proceedings by limiting or defining the scope of the trial in advance or obviating the need for a trial altogether …”

As r 10.15 expressly makes clear, it is not necessary that the decision on the separate question will dispose of the proceeding.

[14]   Rule 10.15 makes clear that a preliminary question to be decided may include any question or issue in a proceeding whether of fact or of law, or partly of fact and partly of law, and whether raised by the pleadings, agreement of the parties or otherwise.

[15]   It is clear also that a parallel power to that provided in r 10.15 exists under     r 7.9(1)(e) of the High Court Rules but r 10.15 is normally resorted to. The present application before me is one brought under r 10.15.

[16]   The Court has a general discretion under r 10.15. Each case is to be considered individually.2 But in general it is assumed that all matters in issue in a proceeding will be determined in one trial which is usually the most efficient means of disposing of a proceeding. There is, at least, a moderate presumption against splitting a trial.3 In the past there have been many judicial warnings about split trials. It is recognised that

1      McGechan on Procedure at para HR10.15.01.

2      Clear Communications Ltd v Telecom Corporation of NZ Ltd [1998] 12 PRNZ 333 at 335; Turners & Growers Ltd v Zespri Group Ltd (HC) Auckland CIV-2009-404-4392, 5 May 2010 at [13].

3      Turners & Growers Ltd v Zespri Group Ltd, above n 2 at [10].

what might, at first glance, appear to be a straightforward way of disposing of an issue can easily result in an expensive quagmire that ultimately leads to greater delay than would otherwise have been the case.4

[17]   The burden of persuading a Court to exercise its discretion to order consideration of a separate question under r 10.15 lies on the applicant and is “not insignificant.”5

[18]   What has been seen as the classic statement of the risks of this r 10.15 procedure was set out in the decision of Fisher J in Clear Communications Ltd:6

Split trials risk a number of difficulties. It is often difficult to define with sufficient precision the demarcation between those issues to be addressed at the first trial and those left for the second…It is not always easy to see what matters have become the subject of issues estoppel. It may be necessary to prepare issue estoppel schedules and hear argument as to their scope. A Judge may inadvertently disqualify himself or herself by expressing views on matters yet to be fully addressed at the second hearing…Findings may be inadvertently made without the benefit of evidence and argument envisaged by a party as appropriate only for the second hearing. The second hearing can require the recalling of the same witnesses with needless extra time and cost to the parties and the public. There is duplication of time spent by counsel and the Court in re-acquainting themselves with issues imperfectly remembered from an earlier trial and the time spent traversing those matters in Court. There can be multiple appeals (in extreme cases taking the matter to the Privy Council as in Ryde v Sorenson) before returning to the Court of first instance to embark upon the second phase of the case. Even without appeals, there can be delay in embarking upon a second round of discovery and other interlocutory matters and amended pleadings following the first trial and then the delay of obtaining a fixture for the second hearing. There can be difficulties in ensuring that the same Judge is available for the second hearing, bearing in mind the usual commitments, sabbaticals, retirements and deaths which are the unhappy lot of the judiciary. If a different Judge has to preside at the second hearing there can be difficulties over earlier views as to credibility and the states of the notes of evidence from the first hearing. In my view these and other difficulties together place a heavy onus on any party seeking split trials.

[19]And, as Kós J noted in Hayden v Attorney-General & Ors:7

4      On this note the cases referred to by Wylie J in NZ Iron Sands Holdings Ltd v Toward Industries Ltd [2018] NZHC 1571.

5      Clear Communications Ltd v Telecom Corporation of NZ Limited, above n 2 at 335; KPMG  New Zealand v Gemmell (HC) Auckland CIV-2008-404-4288, 27 March 2009 at [20].

6      Clear Communications Ltd v Telecom Corporation of NZ Limited, above n 2 at 335.

7      Hayden v Attorney-General & Ors CIV-2010-485-2380, 4 November 2011 at [48].

[48]     Complex cases in particular are ones where the Rule 10.15 procedure may be inappropriate. As Lord Scarman once said:

Preliminary points of law are too often treacherous shortcuts. Their price can be, as here, delay, anxiety, and expense.¹⁹

19 Tilling v Whiteman [1980] AC 1 at 25.

[20]   The approach often adopted in determining an application under r 10.15 was set out in Turners and Growers Ltd v Zespri Group Ltd8 by White J. He summarised various criteria to be taken into account in considering applications of this type that have been recognised in other cases as helpful and relevant as follows:

…

a)The likelihood of delay in finally resolving the proceeding.

b)The probable length of the hearings if there is a split trial.

c)Whether a decision one way or the other on the separate questions would end the litigation.

d)The impact on the length of any subsequent hearing.

e)The balancing of the advantages to the parties and the public interest in shortening a litigation as against any disadvantages asserted by parties opposing a split trial.

f)Demarcation difficulties in defining issues to be addressed at the first trial.

g)Resulting difficulties of issues estoppel.

h)Inadvertent disqualification of a Judge who has expressed views at the first trial on matters for decision at the second trial.

i)Inadvertent findings at the first trial upon matters that are for full evidence and argument at the second hearing.

j)The need to recall some witnesses at the second hearing.

k)The duplication of time involved in the Court and counsel “coming up to speed” again for the second hearing.

l)The prospect of multiple appeals.

m)A second round of discovery or other interlocutories and amended pleadings following the first trial.

8      Turners & Growers Ltd v Zespri Group Ltd, above n 2 at [10] – [13].

n)Rostering difficulties in ensuring that the same Judge is available for the second hearing.

…

[21] It is useful to keep these criteria in mind in considering applications such as the present and I have done so here. Principal questions, however, that are likely to fall for consideration when a separate question application is before the Court, have been summarised in a number of cases as outlined below.9 (These questions provide a practical approach in working through the criteria outlined above at [20].) The questions are:

(a)Will there be difficult demarcation questions between those issues to be addressed at the first trial and those left for the second?

(b)Will the separate question(s) bring the proceeding to an end?

(c)What potential timesaving does the separate question(s) offer?

(d)How will appeals be dealt with?

(e)Are there any other practical considerations tending one way or the other?

[22]   I will now turn to address the present application with reference to each of these principal questions.

Demarcation

[23]   In assessing this demarcation issue, consideration is to be given to what issues arise on the separate question hearing, what issues remain for the second hearing and in each case what evidence may be required to dispose of those issues.10

[24]On this aspect, Mr Brown for the plaintiffs contended:

9      Hayden v Attorney-General & Ors [2011] 22 PRNZ 1 (HC); Turners & Growers Ltd v Zespri Group Ltd, above n 2 at [11]; Karam v Fairfax New Zealand Ltd [2012] NZHC 1331 at [59] and NZ Iron Sands Holdings Ltd v Toward Industries Ltd, above n 4 at [38].

10     Haden v Attorney-General, above n 7 at [50].

(a)The questions for determination here are questions of law. They pertain to the interpretation of a single provision in the policy that he claims is narrow in nature and they are able to be determined in isolation from other matters at issue.

(b)Given the questions are questions of law, he contends that little evidence will be required for the determination of the questions. He suggests that, as the contractual provision in question is contained in the defendant’s standard policy wording, there is no need for extrinsic evidence to aid in its interpretation.

(c)He argues it is not expected that the relevant facts will be contentious and the majority, if not all, should be able to be agreed between the parties. On this aspect, he provides the following examples:

(i)There seems to be no dispute that the cladding at the property needs to be replaced as a result of earthquake damage. The defendant, he says, has previously gone to the effort of detailing the replacement of the cladding and applying for a building consent. At no stage has the defendant advised the plaintiffs that it no longer accepts that the cladding needs to be replaced, according to Mr Brown.

(ii)He contends the parties accept that the Council would require a waiver in order to proceed with the replacement cladding and that the Council would require the plaintiffs to sign the waiver statement to facilitate this.

(iii)The terms of the statement are clearly known.

(iv)The Council has declined the building consent due to an inability to determine compliance on reasonable grounds with the Building Code and the Building Act.

[25]   In considering these arguments advanced for the plaintiffs I turn to the issue that is proposed for a separate question hearing here. This is whether obtaining a waiver of cl B2 of the Building Code in respect of the house cladding complies with the policy terms. If this matter was to be the subject of a separate question the other issues that would remain for determination at a subsequent trial, as I see it, would include:

(a)The full extent of the earthquake damage to the dwelling;

(b)The scope and cost of repairing that earthquake damage;

(c)The apportionment of repair costs between earthquake events; and

(d)The settlement of the plaintiffs’ claim for damage to parts of the insured property under the policy which are not covered by EQC.

[26]   To hear the proposed separate question, I anticipate that evidence might be required before the Court regarding the following:

(a)The nature and impact of the coastal inundation natural hazard at the property, including the history of the hazard at the site which predates the earthquakes.

(b)The nature of the existing exterior wall cladding and the damage to that cladding.

(c)The scope and cost of repairing the earthquake damage to the exterior wall cladding, and specifically including any alternative repair strategies for the cladding which may be considered to be reasonable (a matter which, as I understand it, has not as yet been investigated).

(d)Whether the plaintiffs’ pleaded alternative strategy of lifting the dwelling is a reasonable one and is also technically feasible from an engineering and construction perspective. This is important first, in view of the impact that this lifting would have on the structure and

secondly, whether lifting the dwelling is feasible from a legal point of view in the light of the natural hazard provisions of the Building Act 2004 and the recession plane requirements of the Council on maximum building height.

(e)The scope of works necessary to achieve lifting of the floor level of the dwelling and its impact upon foundation requirements, including the extent to which the floor level would need to be lifted to have the cladding comply with cl B2 of the Building Code, any proposed changes to the configuration of the dwelling (including the internal garage) which are necessary due to the lift, and any consequential damage.

(f)The impact of obtaining a waiver under s 67 of the Building Act 2004 in respect of the proposed replacement (or any alternative) cladding, as compared to the impact of lifting the dwelling and having a natural hazard entry noted on the property Certificate of Title (which, as I understand it, is likely to be a requirement).

[27]   If the plaintiffs’ present application succeeds and determination of the separate question was to be ordered, it seems clear that this Court would not have the benefit of full evidence and argument from a trial prior to making its decision. This risks a possible conclusion from the Court that it is unable to answer the proposed separate question if it does not have sufficient evidence before it as to the scope of works reasonably required on the various matters outlined above, and the attendant waste of time and work all this would involve.

[28]   And, in any event, this evidence regarding the earthquake damage and the required repair strategy would also be needed at any subsequent trial.

[29]   In my view, this may well lead to demarcation issues arising between the two hearings. Further, there might be potential duplication of evidence and the need for possible recall of witnesses from the separate question hearing to appear at the subsequent trial. Unintended issue estoppels may also be created by inadvertent

findings on matters that were intended to be the subject of full evidence and argument at the subsequent trial. Possible disqualification of the Judge concerned, if views are expressed on matters intended to be finally decided at the subsequent trial, could also occur.

[30]   Notwithstanding this, in the present case, as I understand it, the plaintiffs continue to maintain that their proposed separate question is a narrow question of law which can be decided on little evidence and in isolation from other issues in this proceeding.

[31]   The defendant responds, suggesting that a determination of how the policy responds in the present situation is a combination of both policy interpretation questions and application of the policy terms to the particular facts that apply. The defendant notes also that reasonableness has a part to play in determining what is required to reinstate the damage to the dwelling in accordance with the policy terms. An assessment of how the policy applies to the facts here and what is a reasonable approach by the insurer and the insured cannot be made in isolation from the full factual matrix. I agree.

[32]   If consideration of a separate question was to be ordered here, the defendant says it will argue that the alternative strategy of lifting the house proposed by the plaintiffs (or any other proposed alternative strategy) is not “necessary” for compliance, given that the Christchurch City Council is willing to grant a waiver.

[33]   The defendant says it will also argue that applying the particular policy terms here to the facts of this case will further support its position. Evidence on the matters I outline at para [26] above will therefore be required for the defendant to present its full case at the separate question hearing.

[34]   The defendants note too there has not yet been expert conferral in this matter so the parties are not in a position to agree on any of the matters I outline at para [26] above. The defendant says it is likely there will be some disputed facts with evidence required. I am satisfied all this engages the warning expressed by Courts on earlier

occasions that preliminary separate question hearings can be problematic where there are disputed facts.

[35]   I accept the submissions advanced before me on this aspect by Mr Durrant for the defendant and conclude that there are likely to be difficult demarcation questions between the issues to be addressed at the first hearing relating to the suggested separate questions and those left for the second hearing involving the substantive trial.

Will the separate question bring the proceedings to an end?

[36]   On this aspect, I am satisfied that neither answer to the separate question that is raised will finally resolve all issues in this proceeding. It would not conclude matters relating to the extent of the earthquake damage to the dwelling, the scope and cost of repairing that damage, apportionment between events and the settlement of the plaintiffs’ claim for damage to parts of the insured property under the policy not covered by EQC.

[37]   Although Mr Brown for the plaintiffs contends that the waiver is the major issue in dispute between the parties at this point, and if it would not resolve all matters it would significantly narrow issues should a substantive trial take place, I am not satisfied it would settle those matters I have outlined above. Fragmentation of the case in this way, too, in my view, would be likely to create difficulties.

[38]   Although it is not determinative that the fact a separate question, if answered affirmatively, would not bring the proceedings to an end, this is also a consideration tending against granting the application. Here I find that the negative answer to this particular question also tends against granting the application.

What potential timesaving does the separate question offer?

[39]   This enquiry requires a mathematical approach where the applicant should be able to demonstrate by reference to time estimates the potential time saved if the question is answered affirmatively. This question also involves a consideration of any potential delay which might occur to final resolution of the whole case and any associated inefficiencies resulting from splitting the trial into two parts.

[40]   Before me counsel suggest that one or two days will be required for the separate question hearing, assuming evidence is given via affidavits but anticipating that some cross-examination would be required. It seems also to be agreed that a full trial on all issues would likely take between around six or eight hearing days and    10 hearing days.

[41]   Overall, I have some doubt as to whether there is likely to be any overall timesaving here when taking into account both the time required for the separate question hearing and the time required for a subsequent trial on all other issues. Some duplication of evidence between the separate question hearing and the subsequent trial, it seems, is likely and would to some extent erode any timesaving. Duplication of time for the Court and counsel in preparing for the two hearings must also be anticipated, in my view.

[42]   Lastly, by the time any separate question was to be finally determined, any subsequent trial would probably be scheduled for a later date than can be scheduled now if the parties proceed straight to a full trial.

[43]   For all these reasons this aspect, in my view, falls in favour of the defendant as well.

How will appeals be dealt with?

[44]   Before me, counsel suggested that there is a real prospect in this case of appeals on the proposed separate question issue. It is said that it is a contentious issue at the heart of the dispute between the parties, and the answer to that separate question could also have some precedential impact on other cases. Any appeals would cause further delays in ultimately resolving the proceeding.

[45]   Again, this aspect, in my judgment, falls in favour of the defendant and tends against granting the present application.

Are there any other practical considerations tending one way or the other?

[46]   The defendant suggests that another practical consideration is that there may be rostering difficulties in having the same Judge consider the separate question and the subsequent trial. In my view, this could also be a concern here.

[47]   In response, Mr Brown for the plaintiffs contended that there were certain other practical considerations which he suggested tended towards granting the present application.

[48]   First, he suggested there would be a reduction in expert evidence required at the substantive trial and therefore the associated costs because, if the waiver issue is not resolved prior to the substantive trial, the parties’ experts would have to provide evidence in respect of two hypothetical situations. I disagree, however and, for the reasons I have outlined at above at some length, am not satisfied that a proper consideration of the waiver issue would involve duplication of preparation time and the evidence required.

[49]   Mr Brown suggests that if the preliminary questions are to be heard and determined in favour of the defendant this might influence whether or not the plaintiffs proceeded any further with this action. This could assist their consideration of matters and minimise the extent of any adverse costs award they may face. Whilst I accept there may be something in this argument for the plaintiffs, it is always a tactical matter for them in bringing this substantive proceeding overall and it does not override the other concerns I have outlined above.

[50]   Lastly, Mr Brown suggests there is a wider public interest in determining the preliminary questions which might benefit other insurance claims which are both before this Court or otherwise. He suggests, too, that any viva voce evidence required in a preliminary question hearing would not be contentious and would be limited to evidence from a representative from the Council. On this last evidence aspect, I disagree for the reasons I have outlined above. So far as the public interest argument is concerned, again this is a matter which would turn upon the particular facts in this case and alternative repair remedies which might be available.

Conclusion

[51]   For all the reasons I have outlined above, I conclude that the plaintiffs have not done sufficient here to satisfy the onus upon them to displace the presumption that all matters in this proceeding should be determined at one substantive trial. The weight of factors I have outlined above point against having a separate question hearing in this case. As I have noted, there would be difficult demarcation issues in having a separate question hearing, this would not bring the proceeding to an end, it is likely there would be little, if any, time savings (and perhaps the reverse would occur), and there would be real prospects of further delays through appeals.

[52]The present application is therefore dismissed.

[53]   But, in refusing the application I do note the need for the matters the subject of this dispute to be addressed with some expedition. That said, I have earmarked for a 10-day substantive trial the two-week period starting 10 December 2019. These dates are available, and counsel are to confirm with the Registrar their availability for a trial at this time within 10 working days.

[54]   Given that these dates prove to be suitable, I direct too that a pre-trial conference with the allocated Judge is to take place at 2 p.m. on 4 November 2019.

[55]   Leave is also reserved for the parties to apply further for pre-trial directions if required.

Costs

[56]   The defendant has been successful in opposing this application and I see no reason why, as in the usual way, costs should not follow the event.

[57]   An order is now made that the defendant is entitled to costs on this matter on a category 2B basis together with disbursements which will include a return flight from Auckland to Christchurch for one counsel. I am satisfied here that in this matter the use of Auckland-based counsel to argue this relatively complex matter was appropriate.

[58]   I disallow a disbursement claimed by the defendant, however, of one nights’ accommodation for Auckland-based counsel. I fail to see how there was any need for counsel to travel to Christchurch at any other time than early on the morning of this one-day hearing.

...................................................

Gendall J

Solicitors:

Saunders Robinson Brown, Christchurch Fee Langstone, Auckland