Minister of Education v Jasmax Limited

[2012] NZHC 1668

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-6480 [2012] NZHC 1668

BETWEEN  THE MINISTER OF EDUCATION First Plaintiff

ANDTHE SECRETARY OF EDUCATION Second Plaintiff

ANDTHE BOARD OF TRUSTEES OF PAPATOETOE INTERMEDIATE SCHOOL

Third Plaintiff

ANDJASMAX LIMITED First Defendant

ANDBGC 1990 LIMITED Second Defendant

ANDSUMMIT ROOFING 1998 LIMITED Third Defendant

Hearing:         10 July 2012

Counsel:         SC Carruthers for plaintiffs

P Barratt and BA Alcorn for first defendant

Judgment:      12 July 2012

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application for further and better particulars]

Solicitors:           Meredith Connell, PO Box 2213, Auckland 1140

Jones Fee, PO Box 1801, Auckland 1140

THE MINISTER OF EDUCATION V JASMAX LIMITED HC AK CIV-2011-404-6480 [12 July 2012]

The application

[1]      The first defendant applies for an order that the plaintiffs file and serve a more explicit statement of claim providing particulars in relation to a number of paragraphs that are identified in Schedule 1 to the application.

[2]      The application is made in reliance on r 5.26, the relevant parts of which provide:

5.26     Statement of claim to show nature of claim

The statement of claim—

(a)       must show the general nature of the plaintiff's claim to the relief sought; and

(b)       must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff's cause of action; and

(c)       must state specifically the basis of any claim for interest and the rate at which interest is claimed; and

…

File history of the application

[3]      This proceeding was commenced by the filing of a statement of claim and notice of proceeding on 11 October 2011.  On 23 November 2011 the first defendant requested further and better particulars of the statement of claim by letter.   The plaintiffs’ solicitors replied by letter dated 17 January 2012 in which they advised that the further particulars would not be provided.   The first defendant filed its application  for  further  and  better  particulars  on  27 January  2012.    A notice  of opposition to the application was filed on 13 February 2012.

[4]      The matter was reviewed by Associate Judge Bell on 20 March 2012.  In his minute of that date he recorded the following:

[3]       The first defendant has not filed a statement of defence.  Instead, it has applied for further and better particulars.  The first defendant’s representatives and experts have inspected the school, accompanied by the plaintiffs’ experts. That exercise should have assisted the first defendant in identifying the matters in issue, the subject of its particulars request.  The first defendant is directed to file and serve a statement of defence by 30 March 2012.  In the meantime, it should clarify with the plaintiff any residual concerns as to particulars it seeks.  If the first defendant wishes to continue with its application for better particulars, even after the inspection of the school and after filing a statement of defence, it should advise the court.  The matter will then be included for argument in one of my chambers lists.

In the same minute Associate Judge Bell made orders which required the plaintiffs and the first defendant to serve affidavits of documents by 27 April 2012 and to provide the documents for inspection by 11 May 2012.

[5]      The file was next listed before Associate Judge Abbott on 11 May 2012.  In

paragraph 2 his Honour’s minute of that day he recorded:

Since the matter was last before the Court the experts for the first defendant

… have attended the site and inspected the building with the plaintiffs’ experts.   Unfortunately, at least at this point, that has still not lead to any resolution of the application.  The parties affected (the first defendant and the plaintiffs) seek allocation of a defended hearing, and a direction for filing of affidavits in reply.

His minute then made directions for the fixture for disposal of the application.

[6]      Affidavits of documents were filed on behalf of the plaintiffs on 24 February

2012 and on behalf of the first defendant on 10 May 2012.   Counsel advised that inspection had taken place.  I mention this because it has significance so far as one of the critical particulars in the statement of claim is concerned.

[7]      An  amended  statement  of  claim  was  filed  on  22 June  2012.    It  is  of significance because the plaintiffs abandoned a claim they made in respect of the Music Block of the subject school.  The effect is to limit the plaintiffs’ claim to one of defective design and  building supervision work carried out in respect of the Technology Block at the subject school.

[8]      This proceeding relates to alleged weathertightness issues in the Technology Block located at the Papatoetoe Intermediate School.  The plaintiffs allege that the first  defendant  was  engaged  to  provide  architectural  and  project  management services for the design and construction of alterations to the school’s existing Technology  Block.    The  plaintiffs  say  that  the  Technology  Block  suffers  from various defects and damage, and that the defects and damage are a result of the first defendant’s negligence.

The plaintiffs’ opposition

[9]      The plaintiffs oppose the application and say that the particulars sought are either:

(a)      Matters of evidence that are not required to be pleaded, or clutter the statement of claim with unnecessary detail and will be fully disclosed with the exchange of briefs of evidence; or

(b)      Matters of law that are not required to be pleaded; or

(c)       Not within their knowledge and are not required to be pleaded.

The plaintiffs say that the first defendant has adequate notice of the nature of the case to be met and that, with the amended statement of claim, there is as much detail as is reasonably possible to be given and that there is no pleading deficiency that requires rectification.

The Court’s approach to an application for particulars

[10]     The starting consideration is, of course, r 5.26. The pleading must:

(a)       show the general nature of the claim in relation to the relief sought;

(b)give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court  and  the  other  party  against  whom  relief  is  sought  of  the plaintiff's cause of action.

[11]     The purpose of the pleading is “so that the Court knows what it is to rule

upon and the defendant knows the case which it must meet”.[1]

[1] Price Waterhouse v Fortex Group Ltd CA179/98, 30 November 1998 at 18.

[12]     What is required are the basic facts which are said to give rise to the claim and the relief which is sought.[2]  What is also required is advice of the nature of the case as distinguished from the mode in which it will be proved.   Its object is to prevent a party from being taken by surprise.  It defines the issues which the Court must rule upon and it permits a party to know what evidence he ought to be prepared to face.[3]

[2] Ibid.

[3] Re Securitibank Ltd (in rec and in liq) v Rutherford (No 25) HC Auckland A355/81, 10 October 1983.

[13]     Counsel were agreed that because this is a negligence claim there are, in fact, four key elements, namely:

(a)       The existence of a duty of care; (b)      Breach of the duty;

(c)       Loss; and

(d)      A causal connection between the breach and the loss.

[14]     The  plaintiffs’ obligation  is  to  therefore  plead  how  the  first  defendant’s

conduct has breached any alleged duty and how this breach has caused a loss to the plaintiffs and that a loss, in fact, has been suffered.[4]

[4] Commerce Commission v Fletcher Challenge Ltd (1999) 6 NZBLC 102,752 (HC) at 102,763,

which held that unpleaded inferences cannot be included when deciding whether the pleading could as a matter of law, create the potential for liability.

[15]     Paragraph 14 of the amended statement of claim provides:

In or around October 2000, the plaintiffs engaged Jasmax to provide architectural   and   project   management   services   for   the   design   and construction or alterations of the School’s existing Technology Block (Building Works).

[16]     The first defendant seeks particulars which:

(a)       Identify the specific terms and conditions and/or retainer by which the plaintiffs say the first defendant was engaged; and

(b)       Identify which of the plaintiffs engaged the first defendant.

[17]     What is apparent is that there is an allegation that the plaintiffs, or one of them, contracted with the first defendant to provide firstly, architectural services and, secondly, project management services, for the design and for the construction of alterations  to  the  Technology  Block.    The  starting  point  for  the  inquiry  must therefore be to ascertain whether there is a sound foundation for a separate duty in tort in this case, and where it is alleged that the duty arises in the context of an existing contract.

[18]     Despite the fact that there has been an application and discovery has been given, the plaintiffs’ counsel advises that the plaintiffs do not hold copies of the relevant documents  for the building work  and  therefore cannot particularise the terms and conditions, or the retainer, under which the first defendant was engaged.

[19]     That position poses a problem.   It is not alleged whether the contract or retainer was written or oral.  If it is written, one would have expected the document to be identified and that its terms be pleaded.  Unless that occurs, the nature of the instrument is not properly described in terms of r 5.26.  If the contract was said to be an oral contract, one would have expected details of the time and place and the names of persons involved in the concluding of the terms to be pleaded.  That also is a requirement of r 5.26.

[20]     Counsel  for  the  first  defendant  advised  that  they  were  unable  to  find  a specific contract document and, for that reason, it had not been included in the

pleadings.  Counsel also informed me that there was a project manager who is not the first defendant.

[21]     The amended statement of claim contains a Defect Schedule.   Each defect appears to be in relation to the construction of the works, rather than related to a defect arising from design.  It is therefore critical to determine whether the contract or retainer included both aspects as pleaded, namely design and management of the construction.  If there was no obligation to supervise construction, then one cannot discern a duty in respect of this aspect of the case.

[22]     A further problem arises, and that is the contracting party, or parties, on the plaintiffs’ side are not identified.  Without some pleading as to what the terms of the contract were and in what form they were contained, whether oral or written, the Court does not have a basis upon which it can rule on the extent of the duty of care.

[23]     I canvassed  with  counsel  how their inability to  find  relevant  contractual documents might be coped with.   The first possibility would be an allegation that there was a written contract which cannot be located.   If that were the case, one would have expected some precision as to its terms and an identification of the instruments or other circumstances which tell the Court the basis for the pleading. The second possibility would be an allegation that the contract was an oral one.  In that case, there ought to be some indication of the time, place, names of the parties and other circumstances which identify the terms and conditions of the contract so that the Court can identify the precise issues that the pleading is concerned with.   I conclude, therefore, that the first defendant’s request for particulars in relation to paragraph 14 of the amended statement of claim is a proper request and it should be answered.

[24]     The next two requests related to paragraphs 23 and 24, which are contained in the original statement of claim, but which are no longer pleaded.  For that reason, they require no further analysis.

[25]     The  next  paragraphs  which  are  the  subject  of  the  application  are  now paragraphs 21 and 24.  I need not repeat, in this judgment, the pleadings because the

group of pleadings  dealing with  defects  and  results  of defects  are contained  in Schedule 1 attached to the amended statement of claim.  Ms Barratt drew attention to the fact that the Schedule, in its far right column, refers to expected damages and has entries  alongside  various  areas  which  are  said  to  amount  to  defects  where  the damages are described as either minor, moderate, major or unknown at present.  In short, there has not been much advance on the position which was pleaded in the original statement of claim which provided in paragraph 31 that further particulars will be provided before trial.

[26]     That led me to ask counsel whether an appropriate solution to this case was my ruling on the problem area, namely paragraph 14, and deferring the balance of the request for particulars until the building is opened up and repairs are undertaken. Although neither counsel had instructions to consent to such an approach, neither voiced strong opposition to my dealing with the matter on this basis.

[27]     Before departing from the matter, however, it is appropriate that I refer to another area.  Paragraph 26 pleads that as a result of the defects there has, or will be, interference with the education of children at the school.  Paragraph 27 adds that the extent of that inference cannot be established until such time as the defects in the school are fully remediated. Accordingly, this aspect also would be best dealt with at the time the building is opened up and remediation is commenced.

[28]     Paragraph 33, which corresponds with paragraph 40 in the original statement of claim, pleads as follows:

Jasmax has breached its duty of care in the following respects:

(a)       Failed to ensure that the design report, specification and drawings met the standard expected of a reasonable and prudent designer;

(b)       Failed to adequately design the Building Works in accordance with the Functional and Performance Requirements of the New Zealand Building Code and Building Act 1991;

(c)       Failed to adequately supervise the Building Works to ensure they met the Functional and Performance Requirements of the New Zealand Building Code and Building Act 1991;

(d)      The Defects have caused or contributed to the Damage identified;

and

(e)       The Defects have caused or contributed and will cause interference with the education at the School.

[29]     The particulars sought in relation to each of these subparts is as follows:

Paragraph 33(a)

11.       Please identify the facts and circumstances on which the plaintiffs rely in support of their allegations that the first defendant failed to ensure that the design report, specification and drawings met the standard expected of a reasonable and prudent designer.

Paragraph 33(b)

12.Please identify the specific respects in which the plaintiffs say that the  first  defendant  failed  to  adequately  design  the  [Technology Block] in accordance with the Functional and Performance Requirements of the New Zealand Building Code and Building Act

1991.

13.In respect of each matter identified in answer to question 12 above, please   identify   the   section/s   of   the   Building   Code   which requirements the plaintiffs say were not met.

14.In respect of each matter identified in answer to question 12 above, please identify the section/s of the Building Act 1991 which requirements the plaintiffs say were not met.

Paragraph 33(c)

15.Please identify the specific respects in which the plaintiffs say that the first defendant’s alleged supervision of the [Technology Block] failed   to   ensure   that   it   met   Functional   and   Performance Requirements of the New Zealand Building Code and the Building Act 1991.

16.In respect of each matter identified in answer to question 15 above, please   identify   the   section/s   of   the   Building   Code   which requirements the plaintiffs say were not met.

17.In respect of each matter identified in answer to question 15 above please identify the section/s of the Building Act 1991 which requirements the plaintiffs say were not met.

Paragraph 33(d)

18.      In   respect   of   each   alleged   Defect,   presumably   the   Defects

[Technology Block], please provide particulars of:

18.1     The specific extent of the Damage caused by each identified

Defect; and

18.2The facts and circumstances relied upon for the assertion that the Damage has been caused or contributed to by the first defendant’s negligence.

[30]     What  is  immediately  apparent  when  this  pleading  is  considered  and  the request for particulars is made, is that the Court must know what the nature of the contract is and what its terms were.   It may be that the terms of the contract will circumscribe the type of particulars required to complete these pleadings.  In short, there is a need for paragraph 14 to be complete before a close analysis of the subject paragraphs  can  be undertaken  and  their adequacy determined.   The application, therefore, in relation to paragraph 33 falls into the second group of particulars in the amended statement of claim which I consider should best be dealt with at a later time.

[31]     I discussed with counsel how the problem should be approached in this case and, in particular, what was appropriate should I reach the view that the key pleading problem at this stage was paragraph 14.   Ms Carruthers advised that if I was to require a further pleading to paragraph 14, a period of eight weeks should be allowed for further inquiries to be made concerning the existence, or otherwise, of contract documents and for the appropriate pleading to follow.  Because the outcome of that exercise necessarily determines what is appropriate in relation to the other particulars in the amended statement of claim to which I have referred, the next step would appear to be a review of the file approximately four weeks after the response to the order for further particulars in relation to paragraph 14 is given.  These, therefore, are the considerations for the orders that I now make and the timing of them.   In discussing this possibility with counsel, I also used the opportunity to discuss how costs should be dealt with.  I expressed the view that costs should be reserved at this stage, but on the basis that I record that the hearing to date had occupied half a day and that, in my view, this was truly a Category 2 case and there seemed to be no reason to depart from Band B.  I also noted that, because there had been an amended statement of claim filed in the course of the preparation before hearing of the application for further particulars, the question of costs was necessarily affected by r 7.77(8) and that, accordingly, at an appropriate time, consideration would have to be given to that provision in determining the appropriate order for costs.

Orders

[32]     I order as follows:

(a)       In relation to paragraph 14 of the amended statement of claim, the plaintiffs shall provide the following particulars:

(i)       Whether the contract is oral or in writing;

(ii)If the contract is oral, the plaintiffs must provide particulars of the time, place and names of persons and other circumstances which identify the terms and conditions of the contract;

(iii)If the contract is written, the plaintiffs must plead the date of the specific  contract  and  the relevant  terms  and  conditions contained in it which are relied upon for the plaintiffs’ case and which one or more of the plaintiffs were the contracting parties.

Such  particulars  shall  be  filed  and  served  by  memorandum  by

5 September 2012.

(b)      A case management conference shall be held before me at 9:30am on

29 October  2012.    Its  purpose  shall  be  to  address  the  following matters:

(i)Whether any further order or direction is required in relation to paragraph 14 of the amended statement of claim; and

(ii)What   order   or   direction   is   appropriate   in   relation   to paragraphs 21, 24, 26 and 33 of the amended statement of claim.  (To the extent that what is appropriate may require an adjournment to a date in the future when remedial work is

being undertaken on the subject property, counsel are expected to have an appropriate date available).

(c)       The  application  is  adjourned  part-heard  to  9:30am  on  29 October

2012.

(d)      Costs are reserved as indicated in the body of this judgment.

JA Faire

Associate Judge