McCombie Gieck Family Trust No.2 Nominees Limited v Marsh Limited HC Auckland Civ-2008-404-7038

[2011] NZHC 247

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2008-404-7038

BETWEEN  MCCOMBIE GIECK FAMILY TRUST NO 2 NOMINEES LIMITED Plaintiff/First Counterclaim Defendant

ANDMARSH LIMITED Defendant/Counterclaim Plaintiff

ANDIAG NEW ZEALAND LIMITED Second Counterclaim Defendant

Hearing:         24 March 2011

Counsel:         Ms C Meechan for the Plaintiff/First Counterclaim Defendant

Mr J Miles QC and Mr A Denton for the Defendant/Counterclaim
Plaintiff

Mr M Ring QC for the Second Counterclaim Defendant (Excused) Judgment:  24 March 2011

JUDGMENT OF MALLON J (Interlocutory application: Tamati evidence)

[1]      The trial of this proceeding is scheduled to commence on 9 May 2011 before me.  McCombie Gieck (the plaintiff) applies for leave for the evidence of one of its intended witnesses (Darryl Tamati) to be taken before a Registrar ahead of the trial. The application is opposed by Marsh (the defendant and counterclaim plaintiff) but not by IAG (the second counterclaim defendant).

[2]      McCombie Gieck was the owner of a cool store in Hastings.  Marsh was its insurance broker.  McCombie Gieck had insurance for the property with NZI, which is a division of IAG. The policy with NZI did not cover Contract Works (as defined). McCombie Gieck decided to refurbish the cool store.  The proceeding alleges that McCombie Gieck instructed Marsh to organise contract works insurance in respect

of this refurbishment work and that Marsh advised that it had done so.

MCCOMBIE GIECK FAMILY TRUST NO 2 NOMINEES LIMITED v MARSH LIMITED HC AK CIV-2008-

404-7038 24 March 2011

[3]      In the course of the work on the property a fire occurred.  The fire caused significant damage to the property.  NZI advised that part of the damage was from work that was Contract Works as defined and so was not covered.  It also advised that no contract works insurance had been put in place.  McCombie Gieck alleges that Marsh breached its obligations to McCombie Gieck (the claims are made in contract, negligence and under the Fair Trading Act).

[4]      Marsh denies it has breached any duties owing to McCombie Gieck.  It says that the existing property insurance with NZI covered the damage.  It also says that McCombie Gieck told Marsh that the work on the cool store did not include “hot works” and that it knew that NZI would be adverse to hot works.  It says that the fire occurred when hot works were being undertaken.  It says that if Marsh breached any obligations  then  McCombie  Gieck  was  contributorily negligent  and  further  that Marsh did not cause any loss because indemnity for the loss was available under the existing NZI policy.

[5]      From McCombie Gieck’s perspective the two main issues are: (1)     whether Marsh breached its obligations; and

(2)what would have happened if Marsh had acted with reasonable skill and care.

[6]      It intends to call Mr Tamati to give evidence in relation to the second of these issues.    Mr  Tamati  was  the  contracts  manager  of  the  company  carrying  out demolition work at the cool store when it caught fire.

[7]      Mr Tamati’s intended evidence is that:

(a)      the extent of the contractual documentation for the work to be carried out for McCombie Gieck was a quotation for demolition and removal of insulation and partitioning from the Gestro store at Williams Street;

(b)      he was not provided with NZI’s “Fire Safety on Construction Site”

requirements prior to starting the job;

(c)      had he been aware of these requirements the company would have been able to satisfy those that were the responsibility of the company as contractor and at no extra cost.

[8]      Mr Tamati’s last day of work with his present employer is 31 March 2011. He has filed an affidavit saying that if he cannot find permanent employment in New Zealand “which is currently doubtful” then he “will be moving to Australia to work”. He says that it would be “most inconvenient” if he has to return to New Zealand to give evidence at the trial in May.   Counsel for McCombie Gieck advised at this morning’s hearing that it remains the position that Mr Tamati has not found new employment in New Zealand and that after 31 March 2011 he intends to travel to Australia to look for work.   She advises that he initially intends to go to Sydney where he has family but he is prepared to go wherever he can find work.

[9]      Rule 9.17 provides the Court with the power to make the order the plaintiff seeks.   The rule does not specify the factors the Court must consider.   The Court must therefore exercise its discretion in a way that best achieves fairness to the parties.    Counsel  for  McCombie  Gieck  and  counsel  for  Marsh  have  helpfully provided some cases as illustrative of the Court’s exercise of the discretion in those cases.   I have reviewed those cases, though they simply show that the exercise of discretion depends on the circumstances that arise in each case.

[10]     McCombie Gieck accept that it would be preferable for Mr Tamati to give his evidence at the trial and to be cross-examined in the normal way.  It accepts that the order it seeks is a departure from the normal course.  It submits that the departure in this case is appropriate.  It submits that if the order is not made then it will have to keep track of Mr Tamati in Australia and require him to return to New Zealand when he may have only just secured a job.   It notes that Mr Tamati has no financial or other interest in the proceeding and that it has no way of compelling him to keep in contact let alone get on a plane from Australia.  It says that Mr Tamati’s evidence is limited, issues of credibility do not seriously arise and counsel for Marsh is well capable of cross-examining him in advance of trial.

[11]     Marsh says that Mr Tamati’s evidence will not be limited to the matters set out in his brief.  Marsh says that McCombie Gieck told it that no hot works would occur inside the cool stool and that Marsh dealt with NZI on this basis.  Marsh says that Mr Tamati will be cross-examined about what he knew about the hot works risks and   NZI’s   requirements,   including   as   to   any   conversations   he   had   with representatives of McCombie Gieck.   Marsh says that aspects of the cross- examination may depend on the evidence of other McCombie Gieck witnesses and on documents yet to be provided in discovery.  Marsh also says that it is important that the Court makes its assessment of Mr Tamati’s evidence having seen him under cross-examination.

[12]     That last point could be addressed if I heard the evidence rather than it being taken by the Registrar.  But this point was not advanced as Marsh’s primary ground of opposition.  As to its primary ground, I accept that from Marsh’s perspective it is preferable to have Mr Tamati’s evidence given at trial.   There may be material arising from the cross-examination of two McCombie Gieck witnesses which will be relevant to the cross-examination of Mr Tamati and which at this stage counsel for Marsh cannot fully anticipate.  The extent of any prejudice arising from this may not be significant but nevertheless some prejudice cannot be excluded at this stage.  If the prejudice to McCombie Gieck were likely to be significant if the application were not granted I would be minded to grant the application and to address Marsh’s concerns by reserving leave for Mr Tamati to be recalled at the trial.

[13]     However, at the moment it is not known precisely when Mr Tamati will leave New Zealand nor whether he will be somewhere remote and in work by the time of the trial.  The most likely scenario seems to be that he will be in Sydney (given that this is his intended first stop in Australia and the trial is only a few weeks away).  It is not unusual for a litigant to have to keep tabs on the whereabouts of intended witnesses and to make arrangements for their attendance at trial.  The cost of a return trip  from Australia  is  relatively  minor  given  the  size  of  the  claim.    It  will  be inconvenient for Mr Tamati but his affidavit does not say he would be uncooperative and counsel for McCombie Gieck confirms that to date he has been co-operative. Given these matters there is likely to be no prejudice to McCombie Gieck’s claim if

that application is not granted and the balance tips in favour of Mr Tamati’s evidence

being given at the normal time (ie in the course of the trial).

[14]     The application for Mr Tamati’s evidence to be taken in advance of trial is therefore dismissed.  However, should Mr Tamati be in employment in Australia by the time of the trial I would be open to the possibility of his evidence being given by video conference.   Counsel can apply for his evidence to be given by video conference should they wish to pursue this possibility.

Mallon J