Mossman Industries Limited v Pragma Designer Homes Limited
[2018] NZHC 852
•30 April 2018
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2017-419-000166
[2018] NZHC 852
BETWEEN MOSSMAN INDUSTRIES LIMITED
First Plaintiff
PRUDEAUX PROPERTIES LIMITED
Second PlaintiffAND
PRAGMA DESIGNER HOMES LIMITED
First Defendant
SANJIL MISTRY
Second DefendantARCHIMEDIA GROUP LIMITED
Third DefendantSTEPHEN MURRAY KING
Fourth DefendantHAMILTON CITY COUNCIL
Fifth DefendantJOHN KENYON CLARKE
Sixth Defendant
Hearing: 19 April 2018 Appearances:
Victoria Whitfield for the Plaintiffs Michael Talbot for the Second Defendant
Judgment:
30 April 2018
JUDGMENT OF MOORE J
This judgment was delivered by me on 30 April 2018 at 3:30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar Date:
MOSSMAN INDUSTRIES LIMITED & ANOR v PRAGMA DESIGNER HOMES LIMITED & ORS [2018] NZHC 852 [30 April 2018]
Introduction
[1] The plaintiffs, Mossman Industries Limited (“MIL”) and Prudeaux Properties Limited (“PPL”), are the registered proprietors of two Hamilton properties situated at 12 and 18 Campbell Street. The directors and shareholders of both companies are Barry and Kim Mossman, who are husband and wife.
[2] The defendants, to a greater or lesser extent, were all involved in various stages of the building and development of multi-unit townhouses constructed on the two Campbell Street sites. Relevantly, the first defendant, Pragma Designer Homes Limited (“Pragma”), is a construction company. The second defendant and applicant in these proceedings, Mr Mistry, is a director of Pragma, along with his father.
[3] In November 2012 MIL and Pragma entered into building contracts for the construction of both complexes at 12 and 18 Campbell Street. During construction and following the issue of the code compliance certificate (“CCC”) defects in construction were identified in respect of both developments. The plaintiffs have brought claims in breach of contract, negligence and breach of the Consumer Guarantees Act 1993 against Pragma. In respect of Mr Mistry, the plaintiffs each separately sue in negligence.
[4] Mr Mistry now brings an interlocutory application seeking orders dismissing the claims brought by the plaintiffs and in the alternative seeking summary judgment against the plaintiffs. He does so on the grounds that the claims brought against him disclose no reasonably arguable cause of action and, in any event, neither of the causes of action against Mr Mistry are capable of success.1 The plaintiffs oppose the applications.
The plaintiffs’ claim against Mr Mistry
[5] While it is only the claims against Mr Mistry that are the focus of the present applications, it is necessary to set out the background to the events which lie at the
1 While the application was filed on 11 October 2017, before the amended statement of claim was filed on 13 November 2017, the parties are agreed that the aspects of the statement of claim relevant to the present application are unchanged.
centre of the plaintiffs’ claims and the involvement not only of Mr Mistry, but also what is alleged in respect of the other defendants.
[6] The plaintiffs claim MIL engaged the sixth defendant, John Clarke,2 by way of an oral contract to act as the project manager/developer in respect of the developments at both properties. MIL says it engaged the third defendant, architects Archimedia Group Limited, to provide architectural design, project management, and relevantly, site management services relating to the construction of 12 Campbell Street. The Hamilton City Council (“the Council”), the fifth defendant, issued a building consent for the construction of the townhouse complex at 12 Campbell Street on 24 November 2011.
[7] On 28 November 2012, the preparatory steps having been completed, MIL and Pragma entered into a building contract for the construction works at 12 Campbell Street. According to the plaintiffs the contract included the following terms:
(a)Pragma would carry out the works at 12 Campbell Street;
(b)MIL would pay Pragma a contract price of $649,500 including GST together with any variations provided for in the contract; and
(c)Pragma would provide, erect, carry out and complete the work at 12 Campbell Street “in a thorough and workmanlike manner and [in] accordance with the building consent and plans and specifications”.
[8] A CCC was issued for the works at 12 Campbell Street on 12 September 2013. The same day MIL sold the property to Pragma. Also on 12 September 2013 Pragma and MIL entered into an agreement for Pragma to re-sell the property to MIL with settlement taking place five working days after the later of two events; the new certificate(s) of title for the units issuing and search copies being available; and the practical completion of the units being achieved. This arrangement, according to the plaintiffs, was undertaken to address certain concerns around delays in respect of the
2 Mr Clarke is Mr and Mrs Mossman’s son-in-law. In her affidavit Mrs Mossman says that Mr Clarke, who has a background as a property developer, encouraged his parents-in-law to build investment properties with him managing the projects.
works at the properties and were part of a wider arrangement between MIL and Pragma. MIL’s purchase of 12 Campbell Street settled on 27 November 2013.
[9] Despite both building contracts with Pragma being entered into on the same day, it would appear that the second property at 18 Campbell Street was acquired by the plaintiffs a few months after building works had commenced at 12 Campbell Street. A building consent had been issued by the Council on 12 October 2012. For
18 Campbell Street the contract price was $984,100 including GST. As with 12 Campbell Street, Pragma agreed to carry out and complete the building works at 18 Campbell Street “in a thorough and workmanlike manner and [in] accordance with the building consent and plans and specifications”.
[10] On 12 September 2013 a similar sale and purchase agreement was made between MIL and Pragma, with MIL selling the property to Pragma and Pragma agreeing to re-sell 18 Campbell Street back to MIL following settlement or practical completion. On 24 September 2014 the plaintiffs entered into a Deed of Nomination and Assignment whereby PPL was nominated as the purchaser of 18 Campbell Street and all of MIL’s rights and obligations under the contract between MIL and Pragma in respect of 18 Campbell Street were assigned to PPL. The purchase was settled on 26 November 2014.
[11] The Council issued a CCC for the works at 18 Campbell Street on 28 January 2015.
[12] The defects which the plaintiffs claim beleaguered both properties are numerous. These include:
(a)building paper with cuts and/or holes which were not repaired;
(b)building wrap which was not lapped appropriately;
(c)strapping installed at centres which were too great, causing bulging into the drainage cavity;
(d)batons installed on nogs instead of framing timber;
(e)weatherboard clad areas of cladding which were defective;
(f)defective plywood cladding areas;
(g)internal walls which were not plum or straight;
(h)various issues with the flashings; and
(i)defective kitchen joinery (in respect of 12 Campbell Street only).
[13]In respect of 18 Campbell Street the plaintiffs also claim the following defects:
(a)the concreted areas were poured in inappropriate conditions and have pitted;
(b)the finish and workings of the kitchen and other joinery units are unacceptable;
(c)the front doors are damaged and/or are inadequately stained or sealed;
(d)the roof and gutters are scratched, damaged and dented;
(e)the garage door does not seal properly when closed;
(f)cracked tiles at the front entry of some units;
(g)upper level soffits inadequately painted;
(h)dishwashers wrongly ventilated into walls;
(i)lounge cupboard doors twisted and not closing properly;
(j)the required ground clearances have not been complied with; and
(k)moisture in internal walls.
[14] Various losses are claimed arising out of these alleged defects, including investigation and repair costs, building consent and building costs, as well as loss of rental income.
[15] As noted, the claims against Mr Mistry have been brought in negligence by both plaintiffs. MIL and PPL claim Mr Mistry was actively involved in meetings in respect of the works and strategies for the remediation of defects (amongst other tasks and responsibilities) at both properties.
[16] It is alleged that Mr Mistry’s level and nature of involvement and/or control over the operations of Pragma, including but not limited to his role as a director, caused him to owe MIL and PPL respectively a duty of care to exercise reasonable skill and care. MIL and PPL’s pleadings against Mr Mistry are all but identically expressed, except that MIL’s claim is made in respect of 12 Campbell Street and PPL’s in respect of 18 Campbell Street.
[17] By way of example, set out below in full is MIL’s pleading against Mr Mistry in respect of 12 Campbell Street:
“CAUSE OF ACTION BY FIRST PLAINTIFF AGAINST MR MISTRY: NEGLIGENCE
74. …
75.Mr Mistry:
75.1Attended and was involved in meetings in respect of the No. 12 Works;
75.2Was informed of issues and defects with the No. 12 Works;
75.3Assisted with sourcing and arranging sub-contractors;
75.4Was involved in decisions regarding construction programming;
75.5Was the key contact person on behalf of Pragma in respect of any issues with the No. 12 Works;
75.6Was involved in decisions relating to cost control and disputes with any sub-contractors;
75.7Was involved in attempted (sic) to resolve issues between the First Plaintiff and Pragma.
(“Mr Mistry’s No. 12 Services”)
76.As a director and shareholder of Pragma and by virtue of Mr Mistry’s level of and nature of involvement and/or control over the operations of Pragma, including but not limited to Mr Mistry’s No. 12 Services, Mr Mistry owed the First Plaintiff a duty of care to exercise reasonable skill and care to ensure that:
76.1The No. 12 Building Works complied with the No. 12 Building Consent and/or the Building Code;
76.2The No. 12 Building Works were carried out in a proper and competent manner and with reasonable skill and care;
76.3Appropriate materials and construction practices were utilised in undertaking the No. 12 Building Works;
76.4Any defects were remediated appropriately; and/or
76.5The sub-contractors engaged by Pragma were sufficiently skilled and experience (sic) to undertake their works.
77.Mr Mistry breached his duty of care to the First Plaintiff for reasons including the following:
77.1The No. 12 Building Works were not completed in compliance with the number 12 Building Consent and/or the Building Code;
…
77.2The No. 12 Building Works were not carried out in a proper and competent manner and with reasonable skill and care;”
[18] Following paragraphs 77.1 and 77.2 there follows a list of particulars which refer back to the detailed lists of defects set out earlier in the statement of claim, Pragma’s failure to identify defects in the architectural drawings, and the works Pragma subsequently carried out which it is claimed resulted in defects. The plaintiffs then plead that as a result of Pragma’s breaches they suffered the losses claimed. Damages, interest and costs are sought.
Strike out and summary judgment principles
Strike out
[19] Rule 15.1 of the High Court Rules 2016 (“the Rules”) sets out the Court’s jurisdiction to strike out all or part of a pleading. This power exists if the pleading:
(a)discloses no reasonably arguable cause of action, defence or case appropriate to the nature of the pleading;
(b)is likely to cause prejudice or delay;
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the Court.
[20] It is the first ground of strike out which is relied on by Mr Mistry. The approach to be followed is well settled. It may be summarised as follows:3
(a)Pleaded facts, whether or not admitted, are assumed to be true although there is no requirement for the Court to accept facts which are entirely speculative or which beggar belief.
(b)In order to strike out a cause of action it must be clearly untenable. If a pleading is capable of success if amended, it would not generally be appropriate to strike it out.
(c)The jurisdiction to strike out is to be sparingly exercised and only in clear cases. Despite this, the fact that the claim raises a difficult legal question does not mean that it is not amenable to strike out.
(d)The Court should be particularly slow to strike out a claim in any developing area of law such as where a duty of care is alleged in a new situation.
3 Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267; Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33].
Summary judgment
[21] Rule 12.2 of the Rules empowers the Court to give judgment against a plaintiff if the defendant satisfies the Court that none of the causes of action in the plaintiff’s statement of claim can succeed. The principles are equally well settled.4
(a)The question on a summary judgment application is whether the defendant has no defence to the claim; that is there is no real question to be tried.5 In cases such as the present, the defendant must show on the balance of probabilities none of the plaintiffs’ claims can succeed.6
(b)The Court must be left without any real doubt or uncertainty. Unlike strike out, the Court is conferred somewhat greater factual analytical leeway, but only to the extent the Court can form a clear view on the papers, without the need to hear oral evidence.7
(c)The onus is on the party seeking summary judgment. But where a defendant’s evidence is sufficient to show none of the causes of action can succeed the plaintiff will have to respond if the application is to be defeated.8
(d)The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. However, it does not need to accept uncritically evidence that is inherently lacking in credibility, is inconsistent with undisputed contemporary documentation, or is inherently improbable.9
(e)The Court may take a robust and realistic approach where the facts warrant it.10
4 See generally Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2009) PRNZ 162 at [26].
5 Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3.
6 Jones v Attorney-General [2003] UKPC 48, [2004] 1 NZLR 433 at [5] and [10].
7 Body Corporate 90315 v Redican Allwood Ltd [2014] NZHC 1212 at [24].
8 MacLean v Stewart (1997) 11 PRNZ 66 (CA).
9 Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 341.
10 Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
[22] With these principles in mind I now turn to consider each of Mr Mistry’s applications.
Should the plaintiffs’ claims against Mr Mistry be struck out?
Applicant’s submissions
[23] Mr Talbot, for Mr Mistry, submits there is no tenable legal basis on which the plaintiffs can allege the existence of a duty of care. He points to the extent of Mr Mistry’s involvement as pleaded which, in his submission, reveals his involvement was limited to the following:11
(a)administrative responsibilities and functions; and
(b)matters arising out of his role as a director and shareholder of Pragma by virtue of his level and nature of involvement and/or control over the operations of Pragma.
[24] He submits there is no pleading by either plaintiff that Mr Mistry carried out, directly or indirectly, onsite construction work, gave instructions or otherwise controlled construction work. Nor is he linked in any way to the defects pleaded in the amended statement of claim. In terms of the conduct alleged at [75] and [76] of the amended statement of claim, Mr Talbot submits it was administrative in nature and consistent with Mr Mistry’s role as managing director of a large construction company. The conduct pleaded is also consistent with that carried out by a director. Mr Mistry’s functions and responsibilities have not been pleaded, Mr Talbot submits, in a way which could link his conduct, in a causative sense, to the defects as pleaded.
[25] More particularly, Mr Talbot invites me to consider what he terms the “contractual matrix” of the projects. He points out that on their own pleadings the plaintiffs accept that Mr Clarke was the project manager and the architects provided onsite project management services. He submits these pleaded facts corroborate Mr Mistry’s claim that his involvement was only at a high, executive level consistent
11 As set out at [75.1]-[75.7] and [76] of the amended statement of claim respectively, at [17] above.
with his role as director, and for that reason his conduct cannot, in a causative sense, be proximate to the defects as pleaded.
Liability in negligence: legal principles
[26] Counsel are largely agreed on the applicable principles. The Court of Appeal in Body Corporate 202254 v Taylor confirmed that whether a director is tortiously liable turns on the elements of the tort at issue, rather than particular rules of company law.12 In the case of ordinary negligence, the question is not whether the director assumed responsibility, but rather whether they were sufficiently proximate so as to owe a duty of care to the claimants. These matters were comprehensively set out by Potter J in Spargo v Franklin,13 and Doogue AJ in Conning v Martoni Ltd.14
[27] In short, assessment of the liability of a director in negligence requires satisfaction of the elements of negligence. That turns on, as Doogue AJ stated in Conning v Martoni Ltd:
“[38] First, whether there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the alleged wrongdoer, carelessness on his part may be likely to cause damage to the person who has actually suffered the damage. If so, then a prima facie duty of care arises. In assessing proximity, the “degree of control” test (and insofar as Trevor Ivory has assimilated this test into the notion of “assumption of responsibility”) should be considered.
[39] In assessing proximity, judicial comments regarding one-man companies should also be addressed. The fact that a one-man company is the contracting party does not automatically mean that the director has assumed personal responsibility. Indeed, that factor may tell against personal responsibility, for using a one-man company may be seen as a personal disclaimer. There must be clear evidence that the director assumed some personal commitment over and above routine involvement for and through his company.
[40] If a prima facie duty of care arises, it must be considered whether that duty should be negatived by policy concerns.”
(footnotes omitted)
12 Body Corporate 202254 v Taylor [2008] NZCA 317, [2009] 2 NZLR 17 at [33]-[34].
13 Spargo v Franklin HC Tauranga CIV-2010-470-91, 9 November 2011.
14 Conning v Martoni Ltd [2012] NZHC 401.
[28] The degree of control test was set out by Hardie Boys J in Morton v Douglas Homes Ltd:15
“The relevance of the degree of control which a director has over the operations of the company is that it provides a test of whether or not his personal carelessness may be likely to cause damage to a third party, so that he becomes subject to a duty of care. It is not the fact that he is a director that creates the control, but rather that the fact of control, however derived, may create the duty. There is therefore no essential difference in this respect between a director and a general manager or indeed a more humble employee of the company. Each is under a duty of care, both to those with whom he deals on the company's behalf and to those with whom the company deals in so far as that dealing is subject to his control.”
Application of principles
[29]From these authorities a two-step process is engaged on the present application.
[30] The first step is whether the plaintiffs’ claim is a legal impossibility. If so strike out should be ordered. The second is whether, on the basis of the facts pleaded by the plaintiffs, a claim against a company director cannot, in the circumstances of the case, succeed.16
[31] As for the first step, it is plain from the authorities that a director may be liable in negligence to a person with whom the company is dealing, but only in circumstances where he or she personally, as distinct from the company, owed a duty of care and failed to observe it. This liability arises not by reason of the director’s office but by reason of a relationship of proximity existing between him or her and the plaintiff. It may well be that it is because he or she is a director that the relationship arises, but the fact that they are a director does not of itself create the relationship.17 For these reasons I am satisfied that the plaintiffs’ claims do not amount to a legal impossibility.
[32] This leads to the second question: whether, on the pleadings, a reasonably arguable cause of action is disclosed.
15 Morton v Douglas Homes Ltd [1984] 2 NZLR 548 (HC) at 595.
16 Conning v Martoni Ltd, above n 14, at [10].
17 Morton v Douglas Homes Ltd, above n 15, at 593.
[33] As presently pleaded I am satisfied it is reasonably arguable that Mr Mistry owed a duty of care to the plaintiffs. It is pleaded that he not only attended and was involved in meetings in respect of the works, but was also informed of issues and defects and was the key contact person on behalf of Pragma in respect of any issues with the works. Furthermore, it is specifically pleaded that by virtue of the level and nature of his involvement and/or control over the operations of Pragma, including but not limited to his services in respect of the properties, he owed the plaintiffs a duty of care to exercise reasonable skill and care in the ways particularised.
[34] From the pleadings, it is evident that Mr Mistry is being sued because of his particular involvement in the projects rather than in his capacity as a director. The pleadings claim he was not merely involved at a high level, but in the day to day management of the works. The plaintiffs have plainly recognised that despite both Mr Mistry senior and Mr Mistry sharing the ownership of Pragma they undertook different roles in the context of the construction and build of the works at 12 and 18 Campbell Street. Mr Mistry senior is not being sued in his personal capacity. Mr Mistry is. That is because the plaintiffs’ claim is based on the factual assertion Mr Mistry was so closely connected to the project, possessed knowledge of the defects and was directly involved in remediation strategies such that he owes a duty of care to the plaintiffs.
[35] For these reasons I am not satisfied that the plaintiffs’ case against Mr Mistry, as presently pleaded, discloses no reasonably arguable cause of action. It could be that at trial the evidence, fully tested in cross-examination, may prove otherwise, but that is not the inquiry I am required to make on Mr Mistry’s application for strike out.
Should summary judgment be issued in favour of Mr Mistry?
[36] The issue under this head is whether Mr Mistry has satisfied me on the balance of probabilities that the plaintiffs cannot succeed in their claims against him. It is trite that on such applications the Court will not normally resolve material conflicts of evidence or assess the credibility of deponents, but I also accept Mr Talbot’s submission, relying on Krukziener v Hanover Finance Limited,18 that the Court need not accept uncritically evidence which is inherently lacking in credibility, particularly
18 Krukziener v Hanover Finance Limited [2008] NZCA 187.
where the evidence is inconsistent with undisputed contemporary documents or is inherently improbable.
The evidence
[37] In support of his son’s applications Mr Mistry’s father, Yogesh Mistry (“Mr Mistry senior”), has made a brief affidavit.19 In it he says that he and his son have been directors of Pragma since it was first founded. He records that Mr Mistry graduated from Waikato University in 2007 with a Bachelor of Management Studies and an LLB. He qualified as a chartered accountant and practiced at PricewaterhouseCoopers before leaving that firm at the end of 2009 to found Pragma with his father. Mr Mistry senior says that from the outset Pragma’s business model was to contract or employ project managers and quantity surveyors. He says his son has no building qualifications and has never worked on a building site in any capacity. In respect of his son, Mr Mistry senior says he has “never been on the tools”. He is not qualified to and has never carried out or supervised any construction work for Pragma or anyone else.
[38] At the time Pragma was undertaking the construction at 12 and 18 Campbell Street, Mr Mistry senior says his son was overseeing the construction of more than 40 other residential or commercial projects for Pragma. He says his son has never been involved in the designing, building, selection of materials, building work or site supervision of any building project including those at 12 and 18 Campbell Street.
[39] In opposition Mrs Mossman has made an affidavit. She, with her husband, is a director and shareholder of the plaintiff companies and was closely involved in all aspects of the development and construction of both properties.
[40] She contradicts Mr Mistry senior’s claim that his son was involved only when high level issues arose with the project.
[41] She says that due to the incompetence of the builders, foremen and project managers engaged by Pragma Mr Mistry was required to “step in and front” the
19 Yogesh Mistry explained that by reason of his son’s extended absence overseas he was making the affidavit on his behalf.
projects. She describes him as “… very much front and centre of the construction works in respect of 12 and 18 Campbell Street”. She says he personally assumed responsibility for dealing with any and all of the issues which arose with the construction works, including defects, delay issues, variations, consent, inspection and compliance problems.
[42] Mrs Mossman says that the vast majority of her correspondence in relation to the project was with Mr Mistry rather than the project managers and that he regularly attended meetings on site to discuss progress and the various issues which were arising. He was the person, she says, the plaintiffs communicated with in relation to any and all issues. She claims the plaintiffs dealt with Pragma’s project managers on only a limited basis and only in relation to minor matters. She says that from her perspective Mr Mistry was the person with effective control over the construction works throughout the building process. She says that throughout he gave various assurances that the defects were minor only or that they would be remediated by Pragma.
[43] Furthermore, she says that when the Council raised issues about 12 Campbell Street before the CCC was issued, Mr Mistry personally resolved these matters with the Council to ensure that the CCC was issued. She records that she now understands the concerns raised by the Council were genuine and related to defects which existed within the development but that the CCC was issued regardless, she presumes because of Mr Mistry’s persuasive intervention.
[44] While Mrs Mossman accepts Mr Mistry was not “on the tools”, she says he was obliged to become involved in the management and oversight of the works and thus assumed primary responsibility for the project on behalf of Pragma by managing all issues relating to construction works and giving directions to the contractors on site.
[45] Mr Mistry has filed an affidavit in reply. In addition to confirming his father’s evidence he says that all of his dealings in respect of Pragma projects, including the Campbell Street developments, were undertaken at an administrative level. He insists he does not manage, supervise or give directions in respect of any construction work
and neither did he, at any stage, exercise control over onsite construction work carried out on either of the projects.
Assessment
[46] Mr Talbot’s submissions, in summary, are that the Court should give little or no weight to Mrs Mossman’s claims that Mr Mistry was actively involved in managing the project and dealing with the various issues, including defects as they arose, because her assertions are broad and conclusory and in the nature of submissions. He criticises Mrs Mossman’s affidavit for its lack of specificity and submits that where reference has been made to the contemporary documentary record her evidence is contradictory and in places actually supportive of Mr Mistry’s evidence.
[47] Furthermore, he submits that the contractual matrix plainly reveals that others involved in the two projects assumed project management roles and that Mr Mistry’s connection with the projects was at a higher executive level, consistent with his position as the director of a large construction company.
[48] Not only was Mr Talbot critical of the dearth of corroborative documentary material, but where the plaintiffs refer to the documentary record he submits it does not support their claims. Mr Talbot took me through various examples in Mrs Mossman’s affidavit which he submitted revealed such contradictions.
[49] I agree with Ms Whitfield that any criticism that the contemporaneous documentary record is fragmented or incomplete needs to be viewed in context. This application has been brought at an early stage in the evolution of the substantive proceedings. There are six defendants. Discovery is incomplete. The final state and extent of the contemporaneous documentary record is unknown. It is all but inevitable further relevant documents will be discovered.
[50] Mrs Mossman refers to other specific issues were raised with Mr Mistry. These related to kitchen joinery, internal walls not being primed or straight, concerns about the concrete patios and the lounge cupboard doors being out of alignment. According to Mrs Mossman all these issues were raised directly with Mr Mistry who assured they would be remediated.
[51] I also agree with Ms Whitfield when she submits if someone, irrespective of their office, is involved in resolving and remediating defects reported to them, it is implicit that their responsibility extends to ensuring the remediation is, in fact, undertaken to an appropriate standard. As an example, Mrs Mossman’s evidence is that Mr Mistry personally assured the Council that there was no need for further inspections of the exterior of 12 Campbell Street and personally assured the plaintiffs that there were no issues with the cladding on 18 Campbell Street. These assurances led to practical completion of the building work and settlement. Defects with the exterior cladding of both developments are currently pleaded. I agree that the existence of this evidence alone is such that summary judgment is inappropriate.
[52] This is a case where there is a direct conflict of evidence. That, in itself, is not necessarily sufficient to justify refusing the application.
[53] Although Mr Talbot pointed to what he submits are contradictions or discrepancies between Mrs Mossman’s evidence and the contemporaneous documentary record, I am not satisfied that the discrepancies, such as they may be, impeach Mrs Mossman’s credibility to the extent that I should have little or no regard to her evidence. The essence of her account is that although she and her husband may have expected Mr Clarke and the architect to have assumed project management responsibilities, they failed in that regard and that failure, combined with the incompetence of others involved in the construction, meant that she turned to Mr Mistry to fill the lacuna left open by the failure of others. Mr Mistry claims otherwise.
[54] I am not required on this application to resolve that impasse. Furthermore, this is not a case where the evidence is inconsistent with undisputed contemporary documents or other statements by Mrs Mossman or is inherently improbable. For these reasons I am satisfied the application for summary judgment should fail.
Result
[55]The strike out application is dismissed.
[56]The summary judgment application is dismissed.
Costs
[57] Costs on unsuccessful summary judgment proceedings are typically reserved until the litigation is determined.20 Where strike out and summary judgment applications are brought in tandem, costs on both applications have been reserved pending the substantive determination of the issues.21
[58] I am satisfied that it would be premature for me to decide the issue of costs now. I do not consider the issues raised are self-contained, and it is more appropriate that any costs award is made following the substantive determination of the merits of the plaintiffs’ claim.
[59] I direct that the question of costs on Mr Mistry’s application for strike out and summary judgment be reserved for determination as part of the final determination of costs at the conclusion of the proceeding.
Moore J
Solicitors/Counsel:
Ms Whitfield, Hamilton Mr Talbot, Hamilton
20 Schmidt v Registrar-General of Land [2015] NZHC 2438, (2015) 22 PRNZ 794.
21 EBS v CAS [2014] NZHC 2929 at [90].
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