Lee v Whangarei District Council
[2014] NZHC 1002
•14 May 2014
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
CIV 2013-488-000469 [2014] NZHC 1002
BETWEEN OLIVIA LEE
Applicant
AND
WHANGAREI DISTRICT COUNCIL First Respondent
K J FUNG
Second RespondentContd…/…
Hearing: 13 May 2014 Appearances:
Applicant in Person (with T Connor as McKenzie Friend) S B Mitchell and H E Waldron for the First Respondent
A Holgate for the Third Respondent
G Swanepoel for the Fourth RespondentJudgment:
14 May 2014
[RESERVED] JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie on 14 May 2014 at 3.30 pm
Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
LEE v WHANGAREI DISTRICT COUNCIL & ORS [2014] NZHC 1002 [14 May 2014]
ANDALTHERM ALUMINIUM NORTHLAND LIMITED Third Respondent
NORTHLAND WATERPROOFING SOLUTIONS LIMITED
Fourth Respondent
DESIGN METAL ROOFING LIMITED
Fifth Respondent
Introduction
[1] Ms Lee seeks leave to appeal out of time a decision given by Mr R M Carter, a member of the Weathertight Homes Tribunal, dated 7 March 2013.1 The notice of appeal was not filed until 20 November 2013.
[2] The application is opposed by the first respondent, the Whangarei District Council, the third respondent, Altherm Aluminium Northland Limited, and the fourth respondent, Northland Waterproofing Solutions Limited.
Factual Background
[3] Ms Lee owns a house in Sandford Road in Ruakaka, Whangarei. She claims that the property suffers from weathertightness problems, and that there has been resulting damage.
[4] On 12 August 2008, Ms Lee applied to the Weathertight Homes Resolution Service for an assessor’s report on the property. That assessment was undertaken in September 2008. The assessor concluded that the house suffered from numerous weathertightness defects, including defects associated with the cladding, the joinery, and the roof. The assessor was also of the view that there had been breaches of mandatory provisions contained in the New Zealand Building Code, and that the house was a leaky building, as defined in the Weathertight Homes Resolution Services Act 2006.
[5] In March 2010, Ms Lee filed a statement of claim with the Weathertight Homes Tribunal. She claimed $460,000 by way of damages from the following respondents:
(a) The Whangarei District Council, as the relevant territorial authority;
(b) A Mr Fung, who is a draftsperson;
1 Lee v Whangarei District Council [2013] NZWHT Auckland 5.
(c) Altherm Aluminium Northland Limited (the joinery manufacturer and installer);
(d) Northland Waterproofing Solutions Limited (the waterproofer); and
(e) Design Metal Roofing Limited (the roofer).
[6] All but Mr Fung opposed Ms Lee’s application on the ground that Ms Lee was prevented from bringing the claim in the Weathertight Homes Tribunal pursuant to s 60(5) of the Act. That section prevents an eligible claim being adjudicated, or prevents adjudication proceedings from continuing, if the subject matter of the claim is the subject of other proceedings initiated by the claimant or brought by way of counterclaim.
[7] As I understand it, the matter was dealt with on the papers – after all parties had had the opportunity to file submissions. On 7 March 2014, Mr Carter released his decision. He found that:
(a) the subject matter of Ms Lee’s claim in the Tribunal was the same as the subject matter in a counterclaim she had brought in District Court;2
(b)the subject matter of Ms Lee’s claim was closely related to the subject matter of an arbitration claim which Ms Lee had brought against the builder, Rob Littlejohn Builders Limited, under the Construction Contracts Act 2002.
Mr Carter held that Ms Lee could not continue the adjudication proceedings in the
Tribunal pursuant to s 109 of the Act and he terminated her claim.
2 Composite Cladding & Signage Manufacture & Installations Ltd v Lee DC Whangarei
CIV-2008-088-000562, 27 October 2009.
Relevant Law
[8] Section 93(1) of the Act provides that a party to a claim that has been determined by the Tribunal may appeal on a question of law or fact that arises from the determination, and s 94(2) provides that any notice of appeal must be filed within
20 working days after the date of the determination to which the appeal relates, or within any further time that the court may allow on application made before or after the expiration of the 20 working-day period.
[9] These provisions mirror r 20.4 of the High Court Rules.
[10] Here, the 20 working-day time limit for filing the appeal expired on 4 April
2013. The notice of appeal was not filed by that date. Rather, Ms Lee filed an application for leave to appeal, and a draft notice of appeal, on 20 November 2013. She filed a further draft notice of appeal on 16 December 2013.
[11] There is no bar to an application to extend time in the present context.3
Indeed, the relevant provisions expressly provide that application may be made.
[12] Nevertheless, an extension of time is an indulgence within the discretion of the court. The overarching consideration is the interests of justice.4
[13] The onus is on an Ms Lee, as the applicant, to satisfy the court that, in all the circumstances, the justice of the case requires that she be given the opportunity to challenge Mr Carter’s determination.5 Factors which the court can consider include
the following:6
(a) the length of the delay;
(b) the reasons for the failure to appeal within time;
3 Inglis Enterprises Ltd v Race Relations Conciliator (1994) 7 PRNZ 404 (HC).
4 Stedmances v Stedmances [1987] 2 NZLR 336 (CA).
5 Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 (CA) at [40].
6 My Noodle Ltd v Queenstown Lakes District Council (2009) 19 PRNZ 518 (CA) at [19] and [22]; Lupton v Commissioner of Inland Revenue [2013] NZCA 82 at [3]; Probst v Mason HC Whangarei CIV-2011-488-000652, 2 November 2011 at [9]..
(c) prejudice;
(d) the merits of the appeal, in the event that leave is granted.
This list is not exhaustive. It is neither possible nor desirable to try and limit the factors which may go to the interests of justice in any given case.
Analysis
The length of the delay
[14] Here, the delay is inordinate. Ms Lee has delayed for a period of some eight and a half months in seeking to appeal Mr Carter’s decision. She is grossly out of time.
[15] Ms Lee was clearly aware of the relevant time limit from the outset. When the Weathertight Homes Tribunal released Mr Carter’s determination, all parties were notified that any appeal had to be filed within 20 working days of the date of the decision. Further, Ms Lee’s own solicitors wrote to her on 13 March 2013, clearly advising her that she had the right to appeal, and recording that any appeal had to be filed by 4 April 2013.
Reasons for failure to appeal within time
[16] Ms Lee, in her affidavits filed in support of the application, advances various reasons why she did not appeal within the required timeframe. Those reasons can be summarised as follows:
(a) that she had no direction;
(b)did not know that there were issues in Mr Carter’s decision that should be appealed, until she had new lawyers look at the determination in around October 2013;
(c) that she was financially disadvantaged and could not afford to appeal at the time;
(d)that she was physically exhausted and mentally stressed, and that as a result, she was unable to make an informed decision whether or not to prosecute the appeal.
[17] In my view, Ms Lee’s complaint that she had no direction is not credible. It is not supported by contemporaneous documentation. As I have already noted, Ms Lee was sent a letter by her solicitors dated 13 March 2013. It clearly outlined the options available to Ms Lee. It told her of her right to appeal against Mr Carter’s determination. The letter suggested that a meeting should be held. The firm specialised in leaky home litigation and the principal of the firm agreed to make himself available for the meeting, notwithstanding that Ms Lee had not, until that point of time, been dealing with him. It is noteworthy that in the letter, the solicitors advised Ms Lee that there was an alternative step she could take – namely commencing High Court proceedings against the respondents. She did not take this step. Nor did she appeal in a timely fashion.
[18] Ms Lee asserts that she did not know that there were so many issues in Mr Carter’s determination that could be appealed, until she had other legal advice in around October 2013. Once again, I do not find this assertion credible. Ms Lee has not disclosed any alternative legal advice she received. Nor does she identify the issues in Mr Carter’s decision which she says should be appealed, except that she asserts that none of the respondents were named in any of the other proceedings she has initiated in relation to the defects with her house.
[19] Ms Lee says that she was financially stressed. I have no doubt but that this was the case. She had been unsuccessful in various other proceedings she had brought, and she was facing various claims for costs. Further, she owed monies to her solicitors, and they had already done a substantial amount of pro bono work. Nevertheless, the costs involved in filing an appeal would not have been significant. Indeed, it is a step that Ms Lee could have attended to herself.
[20] It also appears from the affidavit evidence, and from what Ms Lee told me in Court, that her financial position has not significantly changed in recent times. In the first case management conference for this matter, Ms Lee made submissions
explaining why she would have difficulties providing surety for costs, in response to a request that security should be ordered. In a minute issued on 11 February 2014, Heath J recorded Ms Lee’s assertion that her present financial position does not enable her to pay security at this time, and he ordered that reduced security be paid in the sum of $500.
[21] I do not consider that Ms Lee’s financial difficulties are a convincing reason which adequately explains the delay in this case.
[22] Ms Lee refers to her personal circumstances, in particular, her physical and mental health. In support, she has produced two letters, one from the Northland District Health Board, and the other from a doctor at Central Family Healthcare. The letter from the Northland District Health Board is dated 9 August 2008. It simply records that, at that time, Ms Lee was suffering from osteoarthritis, and pain amplification relating to anxiety and poor sleep patterns. It says nothing about her physical or mental health in 2013. The letter from Central Family Healthcare is dated 12 May 2014. It records that Ms Lee has been receiving treatment for asthma since 20 November 2012. The fact that Ms Lee suffers from asthma may or may not be related to the fact that she lives in a leaky home. It does not, however, suggest that she was suffering from physical or mental stress, such that she was incapable of deciding whether or not to file the appeal.
[23] Further, and in any event, it is clear from Ms Lee’s own affidavit evidence that she was able to deal with other complicated court issues at the time. I refer to this in a little more detail shortly.
[24] In summary, Ms Lee has failed to adequately explain the not inconsiderable delay which has occurred. Unless a credible excuse is made out, the inference must
be that the delay is inexcusable.7
7 Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 at 268, cited with approval; Industrial
Gases Ltd v Andersons Ltd [1970] NZLR 58.
Prejudice
[25] I turn to consider the issue of prejudice, not only to Ms Lee, but also to the respondents.
[26] Here, Ms Lee will be prejudiced if leave is declined. The limitation period has expired, and unless she obtains leave to appeal out of time, her claim against the respondents named in the Weathertight Homes Tribunal proceedings will be at an end. As against this, I observe that the need for leave to appeal out of time is solely Ms Lee’s responsibility. She has brought the present predicament upon herself.
[27] For their part, the respondents were entitled to assume, when an appeal was not brought by Ms Lee, that the matter was at an end. While there is no evidence of decisions they have made in reliance on the fact that no appeal had been brought, in a general sense, I accept that they were entitled to proceed and order their affairs on the basis that any claim Ms Lee might have against them was not going to be pursued.
[28] Were leave to be granted, and were the appeal to succeed, there could well be prejudice. As I note shortly, Ms Lee has already been involved in proceedings against the builder, and the supplier of the exterior cladding, Composite Cladding & Signage Manufacture & Installations Limited. The proceedings against the latter entity have been concluded, and, as I understand it, Ms Lee is currently awaiting an arbitral award in relation to her proceedings against the builder. Were any attempt to be made to join those parties to the proceedings brought by Ms Lee in the Weathertight Homes Tribunal, either or both parties would be very likely to object, and to argue that matters between them and Ms Lee have been concluded and dealt with by another body. The parties to the proceedings before the Weathertight Homes Tribunal, in the event that the appeal succeeds, would undoubtedly be prejudiced if they were unable to join these other entities to the proceedings.
[29] In contrast, Ms Lee, from the outset, could have joined all parties to the one set of proceedings. She did not do so. Rather, she embarked on separate proceedings against two of the parties. She only seeks to sue the present parties now that one of those proceedings has proved unsuccessful, and an adjudicator has held
against her and she is awaiting an arbitral award in the other. Effectively, it seems to me that Ms Lee has simply changed her mind and is now seeking to revisit litigation decisions she made some considerable time ago.
Merits of proposed appeal
[30] Finally, I consider the merits of the proposed appeal, were leave to be granted. That requires a brief consideration of the other proceedings brought by Ms Lee.
[31] In 2008, Composite Cladding & Signage Manufacture & Installations Limited issued proceedings against Ms Lee to recover the unpaid balance of the contract price for the manufacture and installation of the exterior cladding on the house. Ms Lee counterclaimed, alleging defective workmanship on the part of the company. She sought damages of $331,323.55, being the estimated cost of repairing defects she alleges were caused by Composite Cladding, and being the estimated cost of re-cladding the property. Ms Lee represented herself, and Judge Harvey
found for Composite Cladding on its claim and against Ms Lee on her counterclaim.8
[32] Ms Lee then appealed to this Court. She was represented at the appeal hearing, and it was heard by Rodney Hansen J on 12 July 2010. He found that Judge Harvey should have done more to assist Ms Lee as an unrepresented litigant. He referred the matter back to the District Court for a re-hearing of Ms Lee’s counterclaim.9
[33] Ms Lee’s counterclaim was re-heard by Judge Sharp over eight days in October 2011, December 2011, March 2012 and July 2012. Ms Lee was again represented by counsel. Ms Lee’s counterclaim had been amended to expand the claim that had initially been made. She alleged that there were some 21 defects in the building works, and that repair costs would be some $606,000. Judge Sharp
found that only four of the defects were attributable to work undertaken by
8 Composite Cladding & Signage Manufacture & Installations Ltd v Lee, above n 1.
9 Lee v Composite Cladding & Signage Manufacture & Installations Ltd HC Whangarei
CIV 2009-488-828, 16 December 2010.
Composite Cladding.10 She found that none of the defects which were attributable to Composite Cladding’s work were a substantial or material cause of water ingress, and consequently, Ms Lee’s counterclaim failed in large part on the basis that there was no breach by Composite Cladding of the duties it owed to Ms Lee. Judgment on the counterclaim was issued against Composite Cladding, in favour of Ms Lee, on a breach of warranty claim, with nominal damages awarded to Ms Lee of $100. Notably, Composite Cladding had pleaded contributory negligence by Ms Lee, alleging she was both the developer and the project manager. Judge Sharp noted that, having found no significant breach by Composite Cladding, it was not necessary for her to decide on this issue, but she did so in any event, in case her decision regarding Composite Cladding’s negligence was incorrect. She found that the problems with Ms Lee’s house were largely of her own making. She recorded that if she had to quantify Ms Lee’s share of responsibility for the damage that she had suffered, she would have assessed her contributory negligence at 99 percent, and Composite Cladding’s negligence at one percent of the damages claimed.
[34] Ms Lee again appealed to this Court. Again, she was represented by counsel. Before the substantive hearing, Ms Lee applied for leave to adduce further evidence in relation to building defects. That application was heard by me on 21 November
2012. I declined the application.11 The substantive proceeding was heard by
Woodhouse J on 18–20 February 2013, and he delivered his decision on 28 February
2013.12 He held that Judge Sharp was correct in her conclusion that Composite Cladding did not have any liability for using plywood packers, that there was no design fault on Composite Cladding’s part, and that while some defects were due to work that was not adequately done by Composite Cladding, those matters were relatively minor, and could not be said to justify a complete re-cladding. He held that Ms Lee had failed to establish any costs associated with the relatively minor work required. The appeal was dismissed. It is noteworthy that Woodhouse J found that Ms Lee, in substance, if not in name, was the project manager, and that she was
fully involved in and directed many aspects of the construction.
10 Composite Cladding & Signage Manufacture & Installations Ltd v Lee DC Auckland CIV-2008-
088-000562, 16 August 2012.
11 Lee v Composite Cladding & Signage Manufacture & Installations Ltd [2012] NZHC 3164.
12 Lee v Composite Cladding & Signage Manufacture & Installations Ltd [2013] NZHC 354.
[35] Side-by-side with these proceedings, in July 2008, Ms Lee commenced adjudication proceedings under the Construction Contracts Act 2002 against the builder, Rob Littlejohn Builders Limited. It had been involved in the construction of the property on a “labour only” basis. The adjudicator, a Dr Gatley, found in favour of the builder, and ordered Ms Lee to pay the sum of $58,895.22 plus interest to the builder. Ms Lee then lodged an appeal to this court against the determination, and made further claims alleging negligence and breaches of the Fair Trading Act 1986, and the Consumer Guarantees Act 1993, against the builder. She sought damages, including in relation to the repairs she says are required, and for losses resulting from the alleged false representations and deceptive conduct on the builder’s behalf. These proceedings have been stayed pending an arbitration between Ms Lee and the builder. As I understand it, the arbitral Tribunal has conducted a hearing, and Ms Lee told me that she is currently awaiting the arbitral Tribunal’s award.
[36] Against this background, Mr Carter concluded as follows:
(a) That the words “the subject matter of the claim” used in s 60(5) of the Act should be interpreted “as the matter being dealt with in the lawsuit, the matter presented for consideration, the substance of the thing in dispute, taking a reasonably wide view of those phrases”.13
(b)He further held that s 60(5) does not have regard to whether an arbitration has been initiated by the claimants or another person, and that it does not make any distinction between proceedings initiated in a Disputes Tribunal or a court, and those brought by way of counterclaim. He considered that the omission of the words “between the same parties” from s 60(5) was deliberate, and that the identity of the parties against whom claims are made is not definitive of the subject matter.
(c) He considered the other proceedings commenced by Ms Lee in detail, and concluded that the subject matter of the counterclaim brought by
Ms Lee against Composite Cladding was a claim for the costs of a re-
13 Above, n 1, at [15].
clad, due to damage caused by faulty construction or materials, and the subject matter of the claim brought against the builder by Ms Lee were her overall losses, arising from the builder’s alleged negligence and misconduct, including the cost of reinstating the cladding to the house, based on allegations of defects resulting from faulty construction work, and failure to manage the project.
(d)He concluded that many of the defects alleged in the Weathertight Homes Tribunal were the same as those alleged against Composite Cladding and the builder, and that Ms Lee was seeking to rely on the Tribunal claim on essentially the same evidence as she had relied on in the Composite Cladding claim.
(e) He considered that, to allow Ms Lee to continue with the proceedings in the Weathertight Homes Tribunal, would be inconsistent with the purposes of the Act, and that re-deciding issues of fact already determined by other courts was inappropriate. Indeed, he observed that Ms Lee could not pursue the same or similar arguments in different jurisdictions and expect a different result. He opined that there was a risk that the administration of justice would be brought into disrepute if the Tribunal proceedings were to go ahead after all of the various court proceedings and the arbitration.
[37] I have considered Mr Carter’s decision. In my clear view, it was a well reasoned, careful and considered determination. It cannot be said that the decision is clearly wrong. Indeed, in my view, there are no obvious errors in Mr Carter’s reasoning. Were leave to appeal to be granted, the prospects of success in any appeal would be remote.
Conclusion
[38] For all of the above reasons, in my view, this is not an appropriate case on which to grant Ms Lee leave to appeal. It is not in the interests of justice to do so. The application for leave is declined.
Costs
[39] The first, third and fourth respondents are each entitled to costs. In the event that the parties are unable to agree on costs, I direct as follows:
(a) Memoranda in support of any applications for costs are to be filed and served within 10 working days of the date of this judgment.
(b)Any response by Ms Lee is to be filed and served within a further 10 working days.
(c) Memoranda are not to exceed 10 pages in length.
I will then deal with the issue of costs on the papers, unless I require the assistance
Ms Lee and of counsel.
Wylie J
4