McKechnie Aluminium Solutions Limited v Macaulay Metals Limited
[2024] NZHC 358
•28 February 2024
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE
CIV-2022-443-42
[2024] NZHC 358
BETWEEN MCKECHNIE ALUMINIUM SOLUTIONS LIMITED
First PlaintiffVERO INSURANCE NEW ZEALAND LIMITED
Second PlaintiffAND
MACAULAY METALS LIMITED
Defendant
Hearing: 12 December 2023 Appearances:
A J Sherlock and S E M Corban for the Plaintiffs P Hunt and T Clark for the Defendant
Judgment:
28 February 2024
JUDGMENT OF ASSOCIATE JUDGE SKELTON
[1]Before me is an application by the plaintiffs for orders:
(a)that leave be granted to the plaintiffs to apply for summary judgment against the defendant;
(b)that summary judgment be entered against the defendant for liability in respect of the plaintiffs’ claims set out in the amended statement of claim;
MCKECHNIE ALUMINIUM SOLUTIONS LIMITED v MACAULAY METALS LIMITED [2024] NZHC 358
[28 February 2024]
(c)or, in the alternative to (b), that the issue of liability be determined following a trial which is to take place ahead of a trial to determine quantum;
(d)directing that costs of an incidental to this application be fixed and paid to the plaintiffs.
[2] I note that the parties have agreed in advance of the hearing that, if the plaintiffs’ application for summary judgment is not successful, then the issue of liability is to be determined at trial ahead of a separate trial to determine quantum.
[3] The case relates to a fire at the first plaintiff’s premises at 36 Paraite Road, Bell Block, New Plymouth on 10 January 2020. The plaintiffs allege that the defendant caused the fire by negligently undertaking “hot cutting” work as part of dismantling work undertaken at the premises on the day of the fire. The plaintiffs say that the point of origin of the fire was the flat roof of an office (Mr Dittert’s office) adjacent to where the defendant’s workers were undertaking the dismantling work. The defendant says that it has a credible defence to the plaintiffs’ claim, namely that the work it undertook on 10 January 2020 did not cause the fire.
What happened?
[4] The defendant contracted with the first plaintiff to dismantle and remove a redundant aluminium extrusion press from the first plaintiff’s premises. The aluminium extrusion press comprised of an extrusion press, rollout tables and auxiliary plant, including (i) the fans and ducts above the press, and (ii) the steel frame supports on which the fans were mounted above the rollout tables.
[5] The defendant started work on site on 9 December 2019. The bulk of the work was completed prior to 24 December 2019, with most of the press including the auxiliary plant and ducts being dismantled between 9 December 2019 and 24 December 2019.
[6] The last major section of the press to be cut was removed from the site between 6 and 9 January 2020. On 10 January 2020, the defendant removed the remaining rollout tables and fan supports.
[7] There were two other contractors working on site on 10 January 2020. Farnsworth Roofing was undertaking work on the roof in the general vicinity of Mr Dittert’s office. JBE Electrical was undertaking electrical work enlivening the main switchboard and a sub-distribution board close to Mr Dittert’s office.
[8] The work undertaken by the defendant on 10 January 2020 involved a series of “cuts” involving some hot cutting with an LPG cutting torch and some cold cutting with a reciprocating saw.
[9]The key events on the afternoon of 10 February 2020 are:
(a)1.50 pm: Cut I (hot cut) (videoed);
(b)3.53 pm: last hot cut completed (Cut Q);
(c)4.10 pm: last cut completed (Cut R – cold cut);
(d)4.40–4.45 pm: end of fire watch;
(e)5.44 pm: first indication of smoke;
(f)6.21 pm: first indication of flashes or arcing;
(g)6.25 pm: first indication of flame;
(h)6.21–7.18 pm: fire in transition stage;
(i)7.37 pm: activation of fire alarm.
[10] The fire was investigated by experts on behalf of the plaintiffs between 11 January 2020 and 14 January 2020 and this resulted in a Fire Investigation Report
dated 31 January 2020. Experts for the defendant investigated the scene between 18-20 January 2020.
Summary judgment — relevant legal principles
[11]Rule 12.2(1) of the High Court Rules 2016 (HCR) provides:
12.2Judgment when there is no defence or when no cause of action can succeed
(1)The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
[12]Rule 12.3 provides:
12.3Summary judgment on liability
The court may give judgment on the issue of liability, and direct a trial of the issue of amount (at the time and place it thinks just), if the party applying for summary judgment satisfies the court that the only issue to be tried is one about the amount claimed.
[13] The principles that govern summary judgment are now very well settled. In Krukziener v Hanover Finance Ltd, the Court of Appeal summarised the principles as follows:1
The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corporation Ltd v Patel (1987) 1 PRNZ 84 (CA).
Under r 141A [of the previous iteration of the High Court Rules; now r 12.10] the defendant need not file a statement of defence. The onus remains on the
1 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26]–[27].
plaintiff, and summary judgment will be denied if on the hearing of the application it appears that there is an issue worthy of trial.
[14] In Pemberton v Chappell, Somers J observed (in regard to the predecessor to r 12.2) that:2
the plaintiff “satisfies the Court that a defendant has no defence”. In this context the words “no defence” have reference to the absence of any real question to be tried. That notion has been expressed in a variety of ways, as for example, no bona fide defence, no reasonable ground of defence, no fairly arguable defence … On this the plaintiff is to satisfy the Court; he has the persuasive burden. Satisfaction here indicates that the Court is confident, sure, convinced, is persuaded to the point of belief, is left without any real doubt or uncertainty.
[15]Somers J also stated:3
Where the defence raises questions of fact upon which the outcome of the case may turn it will not often be right to enter summary judgment. There may however be cases in which the Court can be confident — that is to say, satisfied — that the defendant’s statements as to matters of fact are baseless. The need to scrutinise affidavits, to see that they pass the threshold of credibility is referred to in Eng Mee Yong v Letchumanan [1980] AC 331, 341 and in A-G v Rakiura Holdings Ltd (1986) 1 PRNZ 12.
[16] The Court of Appeal has also made it clear that it is not ordinarily appropriate to resolve genuinely contested expert evidence in the context of summary judgment. In MacLean v Stewart, the Court of Appeal held:4
We do not doubt that Salmon J examined the strength and merits of the respondents’ claim most carefully. Judge Lance did the same. We do not consider, however, that it was appropriate for either Judge to enter upon such a detailed inquiry. Indeed, Mr Samuel, appearing for the respondents, also invited this Court to examine the respondents’ claim item by item. Although we heard argument at some length on this basis we reiterate that such an exercise is inappropriate in the context of a summary judgment application. Indeed, as argument progressed before us it became increasingly clear that the issues could not properly be resolved summarily. Consequently, we are left with the impression that the learned Judge in the Court below was drawn into the merits of the claim and sought to resolve the competing issues between the parties when his sole task was to decide whether he was satisfied the appellants had no defence.
2 Pemberton v Chappell [1987] NZLR 1 at 3–4.
3 At 4 (lines 10–17).
4 MacLean v Stewart (1997) 11 PRNZ 66 at 68–69.
[17]However, the Court of Appeal also stated:5
The defendant cannot escape liability for summary judgment by raising a false, hypothetical or frivolous “defence” and then contend that the Court cannot be satisfied that he or she has no defence.
[18] The Court will also be cautious in considering summary judgment when negligence is alleged, even on liability, because of the difficulties in establishing the breach of duty.6
[19] The Court will deal with questions of law on a summary judgment application,7 and this includes issues of contractual interpretation.8 This is so even where the question of law is difficult and requires argument, including reference to authority.9
Leave to apply for summary judgment
[20] Rule 12.4(2) HCR provides that an application by a plaintiff for summary judgment may be made either at the time the statement of claim is served on the defendant, or later with the leave of the Court.
[21] No guidelines are laid down in HCR for the granting of leave, the question is a discretionary one and it is up to the party applying for leave to show why it should be granted.10
[22] It is recognised that there are three factors that should be considered in relation to the issue of leave:11
(a)Has the delay in filing been satisfactorily explained?
5 MacLean v Stewart, above n 4, at 69, lines 11–14.
6 Whitehouse v Wellington City Council HC Wellington CIV-2004-485-1415, 8 November 2004; Economy Services Ltd v Smith & Hughes (1989) 2 NZBLC 103,582, at 103,585; McRaeway GroupLtd v Lane Neave [2017] NZHC 1138 at [42]; McGechan on Procedure [HR 12.01.06].
7 Pemberton v Chappell [1987] NZLR 1 (CA) at 4.
8 Zurich Australian Insurance Ltd v Cognition Education Ltd [2014] NZSC 188, [2015] 1 NZLR 383 at [37].
9 At [37] citing International Ore & Fertilizer Corp v East Coast Fertiliser Co Ltd [1987] 1 NZLR 9 (CA) at 16.
10 Tip Top Icecream Ltd v Polarland Ltd (2002) 7 NZBLC 103,564 at [27].
11 Fowler v Selwyn District Council [2021] NZHC 2218 at [12] citing Tip Top Icecream Ltd v Polarland Ltd, above n 10, at [28].
(b)Are the merits of the applicant’s case for the relief sought particularly strong and therefore deserving of determination at a later time by the Court than is prescribed by the rules?
(c)Is there any risk of miscarriage of justice by determining the summary judgment application at the later point in time?
[23] The Court of Appeal has emphasised that leave should not be treated as a mere formality and should be addressed as a prior step to the consideration of the summary judgment application itself:12
We add that it is important that leave be dealt with as a prior step to the merits of an application for which leave is required. The criteria for granting leave need to be addressed, even if the merits of the substantive application are, themselves, an important aspect of the leave decision.
[24] In Waihopai Valley Vineyard Ltd v Savvy Vineyards 3550 Ltd, Andrews J held that the Court should not grant leave to apply for summary judgment out of time unless doing so will have the effect of avoiding prolonged proceedings.13
[25]I now turn to consider the relevant factors regarding leave.
Explanation for delay
[26] The statement of claim was filed and served in July 2022. However, the application for summary judgment by the plaintiffs was not filed until 1 September 2023. The explanation for this delay appears to be that prior to commencing proceedings the defendant had strongly disputed liability but had not provided any explanation for why it was not liable for the fire. Therefore, the plaintiffs decided to revisit the possibility of summary judgment following the exchange of pleadings and discovery. The plaintiffs say that the extensive work undertaken in relation to discovery of quantum related documentation in 2023 led to further consideration of the summary judgment procedure and recognition that liability should be considered separately to quantum. Given the continued absence of any expert analysis put forward by the defendant in support of its position, the plaintiffs decided to apply for summary judgment.
12 Stevens v Barron [2014] NZCA 82, (2014) 21 PRNZ 734 at [13].
13 Waihopai Valley Vineyard Ltd v Savvy Vineyards 3550 Ltd [2015] NZHC 592, (2015) 22 PRNZ 724 at [34]–[35].
[27] The defendant says that there is significant unexplained delay by the plaintiffs in applying for summary judgment. Mr Hunt, for the defendant, submits that the evidence on which the plaintiffs rely to support their application for summary judgment (primarily the fire investigation report dated 31 January 2020 and video footage recorded on the day of the fire) was available at the time the proceedings were commenced. Therefore, Mr Hunt submits that the plaintiffs are unable to say, for example, that the alleged absence of a defence has only recently become apparent through discovery.
[28] The decision to apply for summary judgment does not usually depend on the provision of expert analysis by a defendant in support of its position which would usually only be provided when evidence is exchanged or for the purpose of settlement discussions. In the present case, the justification for the delay in applying for summary judgment appears to come down to the contention that the discovery process led to a recognition that liability could be considered separately from quantum and therefore that summary judgment could be sought in respect of liability alone.
[29] There has been a significant delay between the filing and service of the proceeding and the filing of the application for summary judgment. There may be a satisfactory explanation for that delay. However, this is just one of the factors to consider on the issue of leave. I do not consider it is the determining factor in this case.
Is there any risk of miscarriage of justice by determining the application for summary judgment at this later point in time?
[30] It is not apparent that there is any risk of miscarriage of justice by determining the plaintiffs’ application for summary judgment in respect of liability at this stage. The defendant does not contend that there is any risk of prejudice or miscarriage of justice to it. Rather, it says that there is no risk of injustice to the plaintiffs if leave is declined as the plaintiffs will have the opportunity to prove their case at trial. However, as with the issue of delay, I do not consider that this is the determining factor in this case. I consider that the issue of whether leave should be granted primarily turns on consideration of the merits of the plaintiffs’ application.
Are the merits of the plaintiffs’ case for summary judgment particularly strong?
[31] The first point to note is that, for the purposes of the application for summary judgment, the defendant does not contest the plaintiffs’ allegation that the contract between the first plaintiff and the defendant contains an implied term that the defendant would carry out the demolition work with the care and skill expected of an experienced and competent demolition company, and that the defendant owed a duty of care in tort to carry out the demolition works with all reasonable care and skill. Therefore, these are not questions of law which need to be dealt with as part of the applications for leave and summary judgment.
[32] I will deal with the issue of the merits of the plaintiffs’ case for summary judgment under the following heads:
(a)breach of alleged duty of care;
(b)causation:
(i)whether “slag” and/or “sparks” landed on the roof of Mr Dittert’s office?
(ii)whether slag and/or sparks landing on the roof could have caused the fire?
(iii)is the evidence of fire development consistent with the plaintiffs’ case as to the cause of the fire?
(c)alternative causes of the fire, fire investigation and spoilation of the fire scene.
Breach of alleged duty of care
[33] Mr Sherlock, for the plaintiffs, submits that the defendant’s conduct can clearly be identified as negligent and in breach of the duty it owed because it failed to:
(a)place one or more welding blankets around the protruding section of Mr Dittert’s office so as to seal off that section from flying molten splatter;
(b)alternatively, making all cuts within 10 metres of the protruding section of office by means of a cold cutting technique such as use of a reciprocating saw;
(c)failing to ensure that a member of the team undertaking the work was designated, during the making of hot cuts within 10 metres of the office, to have the sole duty of observing whether slag or sparks from the cutting of the frames landed on the roof of the office;
(d)before leaving for the day, carrying out a very close inspection of the flat roof of the office to check for signs of smouldering; and
(e)arranging for an overnight fire watch to maintained.
[34] The defendant refutes these allegations and says that it exercised the standard of reasonable care and skill expected of a prudent contractor undertaking hot work. Mr Hunt submits that there is a contest between:
(a)the factual evidence of the defendant’s workers who actually did the work, and Justin Stevenson (the defendant’s National Project Manager) who undertook the risk assessment for the project, prepared the safety documents, and led the safety talks at the on-site toolbox meetings each morning; and
(b)the evidence of Mr Sebastian Jonsson (a director of Green Way Ltd, a company that specialises in complex demolition projects) who has given affidavit evidence on behalf of the plaintiffs regarding the defendant’s health and safety documentation and the “hierarchy of controls” that the defendant should have followed to adequately
eliminate or reduce risks (and also gives evidence on Cut Q and Cut I particularly in his reply evidence).
[35] Mr Stevenson and Mr Jonsson appear to have similar levels of experience in this area of construction work. However, Mr Jonsson acknowledges that he does not himself carry out the work of cutting with gas torches, although he says he has clear knowledge and understanding as to the work itself and the trajectories which can be expected to be followed by molten metal (slag). Mr Stevenson says in his affidavit evidence he has “extensive practical ‘hands on’ experience undertaking hot work, assessing the risks involved with hot works and ensuring that appropriate safety controls are in place”.
[36] There are material conflicts of evidence between the defendant’s workers, including Mr Stevenson, and Mr Jonsson. For example, Mr Jonsson states that, consistent with best practice, risk mitigation should have involved shielding the office structure with fire guards or fire blankets during the cutting, and this should have been followed by an extended period of fire watch. In response, the defendant’s workers say that they assessed the risk prior to making each cut to make sure that it was safe and that they were cutting at the best angle so that slag and sparks would be directed away from any combustible material. Robert Lock, who undertook the gas cutting, states that he separately inspected the roof of Mr Dittert’s office, and it was generally clean and free of debris with some dust, and after each cut he would carry out fire watch. Mr Stevenson states:
At paragraph 29 of his affidavit, Mr Jonsson says that prudent practice would have been to shield Mr Dittert’s office with a fire screen/fire blankets to shield the office and its roof from sparks and slag. I disagree. The distance and location of the office annex roof from the hot cutting was sufficient to enable other controls to be utilised. The site supervisor, Mark Sanders, made an onsite dynamic assessment that there wasn’t a risk of sparks reaching the roof of Mr Dittert’s office or any risk of damage or fire if sparks reached the office walls at ground level. He determined that the heavy hot slag would drop onto steel or concrete at a safe distance from any combustible materials.
[37] In his reply affidavit, Mr Jonsson states that this passage suggests that Mr Sanders effectively had to make a decision “on the spot” and that a more cautious decision might well have been made if the question of how to mitigate the hazard
represented by the office had been addressed before 10 January 2020, at a point when there remained time to ensure that welding blankets would be immediately available.
[38] With regard to the hot works permits, Mr Stevenson states that the defendant’s permitting process is designed to be a pragmatic approach to minimise complex documentation that dilutes the effectiveness of the process. Mr Jonsson states that the documentation he reviewed was not adequate and was not properly completed and that the defendant’s approach reflects a company culture of not following appropriate systems.
[39] With regard to the fire watch after completing the cutting, Mr Stevenson states that a fire watch was maintained by an experienced person until approximately
4.40 pm, which was about 50 minutes after the last hot cut (Cut Q). He states that the standard industry practice is for a fire watch of approximately 30 minutes after the last hot cut. However, Mr Jonsson says that the guidelines are a minimum period of time in the context of other appropriate controls being followed. He says that when there are additional risks, a fire watch should remain in place for a longer duration. The plaintiffs have also filed affidavit evidence from Dr Vytenis Babrauskas, a fire scientist based in Arizona, United States of America. Dr Babrauskas says that a firewatch for 30 minutes might have been adequate if a protective covering had covered the office structure. However, in the absence of such cover, the appropriate precaution would have been to put in place a fire watch overnight.
[40] In my view, the defendant’s affidavit evidence with regard to breach of duty reaches the threshold of credibility required in the context of summary judgment. In particular, Mr Stevenson has “extensive practical ‘hands on’ experience in undertaking hot works” and assessing risks and appropriate safety controls. I consider that the conflicts of evidence between the defendant’s witnesses and the plaintiffs’ witnesses can only properly be resolved at trial with the benefit of oral evidence and cross examination of witnesses. It seems to me that fairness requires that many of the points raised by Mr Jonsson in his reply affidavit should be put to the defendant’s witnesses who were actually onsite assessing the risks and undertaking the work so that they have an opportunity to respond.
Whether “slag” and/or “sparks” landed on the roof of Mr Dittert’s office?
[41] The plaintiffs’ case is that the point of origin of the fire was on the roof of Mr Dittert’s office and that the fire was caused by molten splatter or “slag” landing on the office roof and causing the medium density fibreboard (MDF) on the roof to smoulder and ultimately catch fire.
[42] The plaintiffs rely on CCTV footage from the factory and handheld mobile phone video of Cut I taken by a roofing contractor on site on 10 January 2020. The plaintiffs say that this is compelling evidence of the fire starting at the point of origin identified by the plaintiffs’ fire investigation expert, Russell Joseph, and that this was caused by the work undertaken by the defendant. Mr Joseph is a forensic fire investigator and the managing director of Corporate Risks Limited and began his investigative career with the New Zealand Police in 1981. He has examined over 3000 fires throughout New Zealand and overseas.
[43] Mr Sherlock submits that the combined effect of the evidence of Mr Joseph and Mr Jonsson, taken together with the video footage of Cut I and the CCTV footage is to show that molten splatter did land, or at least must have landed, on the office roof.
[44] Mr Hunt submits that the video footage (both the CCTV footage and video of Cut I) does not speak for itself and requires interpretation which is not straightforward.
[45] I have reviewed the video footage of Cut I and the CCTV footage. I agree with Mr Hunt that the CCTV and phone video footage does not speak for itself in the sense that findings of fact can be properly and confidently made by the Court simply from viewing the footage. I agree that the footage requires interpretation including expert analysis.
[46] Mr Hunt submits that there are conflicts of evidence between the expert evidence of Mr Joseph and Mr Jonsson, and the evidence of the defendant’s expert fire investigators, David Noble and Simon Cox, together with the evidence of the defendants’ workers who actually undertook the work.
[47] Mr Sanders, who supervised the work and undertook a fire watch role, states in relation to the video of Cut I:
In the video it looks like sparks are flying in the direction of the roof of Bernhardt’s [Mr Dittert’s] office. That is because of the location and orientation of the camera. The sparks were actually being directed out onto the factory floor. This was a deliberate decision to direct them away from combustible materials and electrical equipment located on the wall of the factory. Because I was standing between the cut and the roof of Bernhardt’s office, for the sparks to fall on the roof of the office they would also have been falling on me.
I am certain that sparks were not falling on me.
[48] Mr Sanders also gives evidence in relation to Cut Q. He states that the position of Mr Lock in the man cage making the cut meant that he was between the cut and the office roof. He states that the cut was immediately adjacent to a column and that the column was also a barrier between the office roof and the sparks. He states that the man cage provided another barrier and that the cutting torch was positioned in a vertical steel channel preventing any sparks from deflecting backwards. He says that the slag dropped to the wet floor at the base of the column and the sparks were directed outwards away from the office roof. He states that it was impossible for slag to get from the cutting locations to the office roof and extremely unlikely that sparks would have gone backwards, bouncing off Mr Lock and through the man cage, reaching the office roof.
[49]Mr Lock states in his affidavit evidence:
In the video it looks like sparks are flying in the direction of the roof of Bernhardt’s [Mr Dittert’s] office. That is not correct. When making the cut I was directing the sparks down and out onto the factory floor. That is because we wanted the sparks to land on the floor where there were no combustible materials and where they could be easily extinguished in the event of a small flare up. The sparks were not landing on the roof of Bernhardt’s office and if they had been I would have repositioned to direct them away from the roof.
[50]With regard to Cut Q, Mr Lock states that:
Because of the barrier formed by the column, the man cage and my body a spark could not have travelled in a straight line to the roof of Bernhardt’s office. Sparks and slag could not have made it onto the roof of Bernhardt’s office.
From the man cage I had a good view of the office roof. If any sparks or slag had made it onto the office roof I would have been able to see them, I did not see any.
[51] Mr Sander’s and Mr Lock’s evidence is consistent with the affidavit evidence of Iain Molloy who was also undertaking fire watch for Cuts I and Q.
[52] Mr Noble is a fire investigator with 38 years of experience and has completed over 4000 fire investigations throughout New Zealand. He states in his affidavit evidence that slag with larger mass would have fallen to the concrete floor before reaching the roof of the office. He states that sparks are smaller in mass than slag and therefore would have been less prone to retain sufficient heat to initiate smouldering on the flat MDF roof.
[53] Mr Cox is a forensic consultant with over 40 years’ experience in the investigation of fires. He states that having viewed the CCTV footage and the video of Cut I, he does not believe that the fire was caused by the hot work undertaken by the defendant. He states that the video shows a shower of sparks being directed across the alleyway to the east of Mr Dittert’s office. He says that it does not show the trajectory of the hot dross which is expected to have fallen to the floor because of its greater mass. He disagrees with Mr Joseph’s view that the video demonstrates how slag from the hot work landed on the roof of Mr Dittert’s office.
[54] In his reply affidavit, Mr Joseph goes into some detail analysing snapshots from the video of Cut I. Mr Joseph disagrees with Mr Sander’s evidence that the sparks were being directed out onto the factory floor. He states that Mr Sanders is “clearly incorrect” in his statement.
[55] Mr Jonsson also goes into some detail in his reply affidavit analysing the video of Cut I. His analysis includes close-up still images from the video and zooming in and slowing down portions of the video to track particular particles. On the basis of this analysis, Mr Jonsson disagrees with the evidence of Mr Sanders that sparks were not falling on him and suggests that the video shows that Mr Sanders takes a significant sidestep inwards so as to shelter under the roof of the alleyway from flying splatter. He also states that throughout the period of cutting Mr Sanders is looking towards the
cut being made, with his back to the office, and therefore would not have the ability to see whether or not splatter was landing on the office roof. Mr Jonsson also raises an issue with regard to “backspray” ejected to the left of the cut point, and says that this is important for the analysis of Cut Q.
[56] With regard to Cut Q, Mr Jonsson refers to zoomed-in CCTV footage from camera 9 which he says is footage of Cut H and Cut Q. He states that the CCTV footage shows that the primary direction of splatter was not at all times to the right of the office, with significant bursts of splatter instead flying out to the left (“backspray”), thereby “creating a virtual certainty” that some of the splatter would come to land on the office roof. Further, on the basis of his analysis of the CCTV footage from camera 9, Mr Jonsson does not believe that Mr Lock could have been positioned as described in his and Mr Sander’s affidavits while carrying out the three cuts at Cut Q. He says that Mr Lock would have been positioned “very much” as shown in the video for Cut I, and this means that molten splatter would have been free to pass through the space between Mr Lock/the man cage and the office roof. He also says that if Mr Lock had been in the position stated by him and Mr Sanders this would have exposed Mr Lock himself to personal danger from molten splatter.
[57] Again, I consider that the defendant’s affidavit evidence on this issue passes the threshold of credibility for the purposes of summary judgment. The evidence is based on consistent factual accounts from the workers who were actually undertaking and supervising the work. The conflicts of evidence between the defendant’s witnesses and the plaintiffs’ experts can only properly be resolved at trial with the benefit of oral evidence and testing by cross examination. In particular, where the plaintiffs’ experts have undertaken detailed analysis of the video footage in their reply evidence and expressed opinions contradicting the defendant’s fact witnesses (and experts) on issues such as where the slag and sparks from the hot cutting were falling, how a witness was positioned, whether sparks were falling on a witness, and what a witness could see, it seems to me that fairness requires that the reply evidence is put to the relevant witnesses so they have an opportunity to respond.
Whether slag and/or sparks landing on the roof could have caused the fire?
[58] The defendant’s expert fire investigation witnesses, Mr Noble and Mr Cox, say that MDF board does not readily burn and neither slag and/or sparks from the hot work would have been sufficiently energetic to ignite a smouldering fire had it landed on the roof. Mr Cox states:
It is unlikely hot dross (slag) or sparks from the hot work undertaken by Macaulay Metals’ employees could have ignited the MDF roof of Mr Dittert’s Office. The key consideration in this regard is that neither the hot dross and/or the sparks caused by the hot work would have been sufficiently energetic to ignite a smouldering fire, and for that smouldering fire to remain undetected from when the hot work was completed until the employees of Macaulay Metals left the premises, in the manner alleged by the plaintiffs.
[59] Mr Stevenson gives evidence of testing undertaken by the defendant involving dropping sparks and slag onto various grades and ages of MDF board and applying a gas torch flame directly to the MDF. He states that in all cases after the hot material or flames were applied it was not possible to create a continued smouldering event and MDF needs an ongoing ignition source to ignite to the point of sustaining a fire. Mr Noble states that this testing demonstrated that while slag produced “pock marks” in the surface of the MDF hardboard, it cooled rapidly without causing the MDF to continue to smoulder or bringing about “non-piloted ignition and self-sustained combustion”.
[60] Dr Vytenis Babrauskas gives evidence on this issue for the plaintiffs. Dr Babrauskas states that a smouldering fire could readily have developed in the circumstances of this case in the time between the last hot cut (being Cut Q) and the time the fire first became visible. He says that is not inconsistent with the scientific research and guidance which indicates that smouldering fires can take many hours to transition to flaming.
[61] With regard to the MDF material, in his reply evidence Dr Babrauskas refers to his own book “Electrical Fires and Explosions” where he reviews the results of several studies looking at rates of particle cooling by virtue of drop in vertical height covering several different forms of welding. He says he would “expect at least the broad picture” to be the same for particles generated by gas torch cutting of steel, and would also expect the phenomenon to be similar for horizontal travel as it is in the
case of vertical falling. On this basis he reaches a conclusion that the temperature of the particles in this case would not have cooled to a sufficient degree as to become incapable of leading to a smouldering fire on the office roof.
[62] Dr Babrauskas also replies to the testing undertaken by the defendant on MDF board. He states that MDF is much more likely to catch fire due to contact with a hot particle than it is in response to an applied flame. He states that the potential for a hot particle to lead to smouldering and ignition of MDF material would have been enhanced if appreciable dust and detritus was present on the roof surface, and/or if the particle became lodged in a crack, crevice or juncture, and/or if the smoulder front reached a boundary between the smouldering material and another material. He says that he understands such junctions or boundaries existed in this case.
[63] Mr Sherlock is critical of the evidence of the defendant’s experts on this issue. He submits that there is insufficient detail to substantiate the opinions put forward and insufficient reference to the science behind their opinions.
[64] A defendant who wishes to maintain that there is an arguable defence is expected to identify that defence and give appropriate particulars of it and a reasonable level of circumstantial detail. An assertion that there is a defence without any elaboration or detail is unlikely to be seen as raising an arguable defence for the purposes of resisting summary judgment.14 In my view, the defendant’s evidence (both fact and expert) on this issue passes the threshold of credibility and provides sufficient detail for the purposes of supporting a fairly arguable defence in the context of summary judgment. I do not consider that the defendant’s experts were required to put forward full details of the science underlying their opinions which are based on their extensive experience as fire investigators, and on the testing undertaken by the defendant. I note that Dr Babruaskas does not provide details of the “extensive research and experience” he refers to in his reply affidavit in support of his opinion that MDF is more likely to catch fire due to contact with a hot particle than an applied flame.
14 Haines v Carter [2001] 2 NZLR 167 at [97(2)].
[65] I do not consider that the evidence of the defendant’s experienced experts can be dismissed at this stage as “false, hypothetical or frivolous”.15 In my view, the evidence of the experts for both parties needs to be tested at trial in order to properly resolve the conflicts.
Is the evidence of fire development consistent with the plaintiffs’ case as to the cause of the fire?
[66] The plaintiffs say that their case as to the point of origin of the fire is confirmed by CCTV footage from camera 9 and camera 12 in the factory which evidences the development of the fire.
[67] The view from camera 9 towards the office was largely obstructed by factory equipment located in between. However, the plaintiffs’ evidence is that there is a narrow aperture of view through to an area just above the roof of the office, and that the first flickers of flame can be seen through the aperture at around 6.21pm on 10 January 2020. There is a significant conflict of evidence between the parties as to the precise location of the area visible through the aperture. The defendant has put forward evidence of a survey which sought to track the exact location, which the defendant says establishes that the base of the view visible through the aperture was around 0.6 metres above the height of the office roof. The defendant suggests that this means that the flickering flame seen through the aperture cannot have originated on the roof of the office.
[68] A key issue here is the actual height of the office roof. The defendant’s evidence contains three estimates of this height which vary from 2.4 metres to 2.7 metres. However, there is no definitive evidence before the Court at this stage as to the height of the office. The plaintiffs’ fire investigation expert, Mr Joseph, gives evidence of photographs that he took immediately in front of camera 9 looking towards the aperture which identified the location of what was visible through the aperture by using a road cone and then subsequently (in the presence of Mr Noble) fluorescent paint on a rolled steel joist/beam (RSJ) and concrete column proximate to the location of Mr Dittert’s office. Mr Joseph states in his reply evidence that:
15 MacLean v Stewart, above n 4, at 69, lines 11–14.
I note that at the end of Mr Smith’s video what I understand is a section of timber is visible immediately above the office roof. I understand the office roof framing would have been affixed to that timber which would in turn have been bolted to the RSJ running across immediately above the rear of the flat office roof.
…
The photographs I took from immediately in front of camera 9 further confirmed that what was visible on camera 9 at 6.21pm …. was a fire beginning to develop at a height just below the height of the steel beam. Thus the low line of flames seen in the camera 9 CCTV footage at that time is not recorded 600mm above the roof of Mr Dittert’s office.
[69] Mr Sherlock submits that the Court cannot rely on the defendant’s conflicting estimates as to the height of the office roof and must accept Mr Joseph’s evidence that the RSJ was visible from camera 9 through the aperture, and since the office roof was affixed to timber which was bolted to the RSJ, the office roof was close to the base of the view visible through the aperture.
[70] However, I do not agree that that the Court must accept Mr Joseph’s evidence for the purpose of summary judgment when his evidence is clearly based on his “understanding” that the office roof framing would have been affixed to the timber shown in the video which was in turn bolted to the RSJ. It seems to me that the evidence of both parties in this regard needs to be tested at trial and there is a need for more definitive evidence as to construction detail of the office area prior to the fire and the actual height of the office roof.
[71] Moreover, there are other conflicts of evidence in relation to fire development which in my view require resolution at trial. For example, Mr Cox gives evidence that, if the fire had been caused by slag or sparks falling onto the roof of Mr Dittert’s office, then this would have typically developed as a conically shaped ‘plume’, centred on the point of ignition. Mr Cox says that the fire first visible in the CCTV footage is not consistent with such a fire plume. Mr Cox says that the development of the fire recorded by the CCTV footage was more consistent with the fire penetrating the wall above Mr Dittert’s office from behind, and subsequently spreading to the roof of the office.
[72] Mr Noble gives evidence that the burn patterns from the fire do not support the plaintiffs’ position that the origin of the fire was on the top of the roof of the office. Rather the burn pattern suggests that the fire started away from the area of the hot works and more likely in the vicinity of the “smoko” room/mezzanine office space behind Mr Dittert’s office. Mr Noble refers to the effects of the fire on the rolled steel floor joist above the office and on lattice beams beneath the roof as supporting his opinion.
[73] Mr Joseph, in his reply evidence, goes into some detail to refute the evidence of Mr Noble and Mr Cox as to the alternative point of origin. He disagrees with Mr Cox that the type of slow smouldering fire which occurs on a flat roof would necessarily have a conical plume. He also disagrees with Mr Noble’s evidence in relation to the damage to the structural steel framework on the basis that Mr Noble has not considered fuel load as a factor relevant to considering the thermal effects.
[74] Again, in my view the defendant’s evidence with regard to fire development passes the threshold of credibility required for summary judgment. I do not consider that the evidence of the defendant’s experienced experts can be dismissed at this stage as false, hypothetical or frivolous. The factual issues and the conflicts of evidence between the experts can only properly be resolved at trial after being tested by cross- examination.
Alternative causes of the fire and spoilation
[75]There are two issues to consider here.
[76] First, there is a conflict of evidence as to whether the fire may have been caused by electrical failure. This issue was first raised by Fire and Emergency New Zealand (FENZ) who initially investigated the fire and were concerned that the fire might be associated with a large mains supply electrical switchboard. However, the plaintiffs have produced affidavit evidence from an electrical engineer, Stephen Watson, with 40 years’ experience, who is regularly engaged to investigate fires which are suspected might have an electrical cause. Mr Watson says that after his initial investigations following the fire he concluded the fire did not have an electrical cause.
[77] The defendant’s fire investigation expert, Mr Noble, says that he identified three locations where there was evidence of electrical arcing on cables and equipment during his investigation, and that any one of the arcing events had the potential to be a point of origin of the fire. He concludes that the fire likely started in the “smoko” room behind Mr Dittert’s office and the cause was likely an electrical event, or a consequence of hot work carried out by the roofing contractor. The defendant has also produced evidence from an electrical engineer, Ross Oliver, with 45 years’ experience in the investigation of electrical and electronic equipment and electrical cable fires and failures. Mr Oliver comments on Mr Noble’s scene investigation and his own examinations of damaged electrical equipment and concludes:
Mr Noble identified arc damaged cables in Smoko Room/Smoke Bay. If any of these cables or an appliance were connected to a Stablok circuit breaker in distribution board 4F2B, then if the circuit breaker failed to operate as intended, this would make a fire more likely.
Even if a circuit breaker functioned as intended, a fire can commence in an appliance due to an electrical fault in the appliance. Similarly a fault caused by damage to a cable can result in a fire. However, a fire is much more likely to start as a result of an equipment or cable fault if the circuit breaker fails to work properly.
[78] In his reply affidavit, Mr Watson says he did not find any evidence of an electrical failure along the lines of that referred to by the defendant’s experts. Mr Sherlock submits that it is notable that Mr Oliver does not say in his evidence that he observed any arcing damage.
[79] Mr Watson also states in his reply affidavit that if the relevant circuit breaker in the power distribution board 4F2B failed to trip as intended to clear an electrical fault, then the circuit breaker forming part of the supply of the power to that distribution board as a whole would have tripped to clear the fault. Mr Watson notes that the circuit breaker in question (located on the new main switchboard) was in fact found to have tripped. However, it is suggested that this tripping is likely to have been an indirect consequence of the fire event rather than because of an electrical fault prior to the fire.
[80] Mr Oliver says in his evidence that the Stablok circuit breakers installed in the distribution board 4F2B were very old and known to have a high failure rate. In his
reply evidence, Mr Watson says that he has carried out further research in this regard and says that the recalled circuit breakers were blue in colour, whereas the relevant circuit breakers at the factory were black in colour.
[81] The second issue arises from Mr Noble’s affidavit evidence that hot work carried out by Farnsworth Roofing Ltd on the day of the fire may have caused the fire. Mr Sherlock submits that Mr Noble’s evidence is comprehensively dismissed in Mr Joseph’s reply affidavit. Mr Joseph says that the “hot work” was the use of a high temperature airgun and, if the fire had been caused by this activity, then it would have been much larger by the time it reached the area above Mr Dittert’s office, which is at odds with the CCTV footage.
[82] The conflicts of evidence regarding the cause of the fire are further complicated by evidence of “spoliation” of the scene. In the fire investigation report attached to Mr Joseph’s affidavit evidence it is acknowledged that spoliation occurred as a result of a contractor moving debris. This was after the scene had been investigated by the plaintiffs’ experts, but before the investigation by the defendant’s experts. The issue is relevant because Mr Noble is critical of the fire investigation by the plaintiffs’ experts. Mr Joseph says in his reply affidavit that the spoliation occurred after the plaintiffs’ experts investigated the scene and did not impact their investigations. He states that he is satisfied that the spoliation did not “materially affect” Mr Noble’s ability to interpret and evaluate the evidence because Mr Joseph was present when the contractor moved the debris and was in a position to assist with the re-examination of the debris.
[83] Again, I consider that the affidavit evidence of the defendant’s experts regarding alternative causes of the fire passes the threshold of credibility required for summary judgment. Both Mr Noble and Mr Oliver have raised the possibility of an electrical cause based on physical evidence (albeit that Mr Oliver does not expressly state that he observed the arcing damage referred to by Mr Noble) and Mr Noble has pointed to hot work being carried out by the roofing contractor as a possible cause. I do not consider that the evidence of the defendant’s experienced experts can be dismissed at this stage as false, hypothetical or frivolous. The competing theories of
the experts need to be tested by cross-examination in order to properly resolve the conflicts of evidence.
Conclusion
[84] I am satisfied that the defendant’s affidavit evidence on all the issues discussed above passes the threshold of credibility for the purposes of summary judgment. The defences raised by the defendant’s affidavit evidence cannot be dismissed at this stage as “false, hypothetical or frivolous.”
[85] I consider that the conflicts of factual and expert evidence are too extensive and the issues too complex for the plaintiffs’ claim for negligence to properly be determined summarily. It would be inappropriate for the Court to be drawn further into examination of the merits of the claim and to seek to resolve the competing issues on an application for summary judgment.
[86] In the circumstances, I do not consider that granting leave to apply for summary judgment out of time would have the effect of avoiding prolonged proceedings.
[87] I conclude that leave to apply for summary judgment should not be granted at this late stage, the application for summary judgment having been made over a year after the proceeding was filed.
[88] For the reasons set out above, I have also reached the view that, even if leave was granted, the plaintiffs would not be successful on the application for summary judgment. The plaintiffs have not satisfied the Court that the defendant has no arguable defence to the plaintiffs’ causes of action for breach of contract and negligence.
Result
[89] The plaintiffs’ application for leave to apply for summary judgment against the defendant is dismissed.
[90] My preliminary view is that costs should be reserved.16 However, if either party disagrees with this preliminary view, then memoranda may be filed not exceeding three pages (excluding costs schedules) and costs will be determined on the papers.
[91] The matter is to be listed in the next Associate Judge’s chambers list for New Plymouth for directions to be given as to the next steps in the proceeding.
Associate Judge Skelton
Solicitors:
Hesketh Henry, Auckland for Plaintiffs McElroys, Auckland for Defendant
16 See NZI Bank Ltd v Philpott [1990] 2 NZLR 403.
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