Paine v Carter Holt Harvey Ltd - [2019] NZHC 478

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-001143

[2019] NZHC 478

UNDER the Consumer Guarantees Act 1993, Fair Trading Act 1986 and High Court Rule 4.24

BETWEEN

DAVID ERIC PAINE and LYNDA CAROLINE BOWERS

First Plaintiffs

KEVIN BRYAN START and FLORENCE ELIZABETH START

Second Plaintiffs

.../Third and Fourth Plaintiffs cont over page

AND

CARTER HOLT HARVEY LIMITED

Defendant

Hearing: 4 March 2019

Counsel:

AS Ross QC, AJ Thorn and RA Dellow for Plaintiffs JG Miles QC, M Heard and ED Nilsson for Defendant

Judgment:

18 March 2019

JUDGMENT OF DOWNS J

This judgment was delivered by me on Monday, 18 March 2019 at 4 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Adina Thorn Ltd, Auckland. LeeSalmonLong, Auckland. AS Ross QC, Auckland.
JG Miles QC, Auckland.

PAINE v CARTER HOLT HARVEY LTD [2019] NZHC 478 [18 March 2019]

DONALD BRAMWELL JACKSON and HEATHER MAY PROCTOR JACKSON, and DONALD
BRAMWELL JACKSON, HEATHER MAY PROCTOR JACKSON and HOLLAND BECKETT TRUSTEE
No.11 LIMITED as trustees of the Jackson Family Trust 2011
Third Plaintiffs

STEPHEN MATHEW DEVCICH, JESSIE DIANA DEVCICH and JOHNNY CHARLES AUGUST as
trustees of the Devcich Family Trust Fourth Plaintiffs

The issues in context

[1] The plaintiffs own homes clad in Shadowclad, a plywood product. Carter Holt Harvey Ltd1 makes, supplies and promotes Shadowclad. The plaintiffs allege Shadowclad is inherently defective, so, it is only a matter of time before it fails. They also allege Carter Holt knew or ought to have known this. Carter Holt denies the allegations. It contends Shadowclad is fit for purpose providing it is used as anticipated, installed correctly and properly maintained. The claim is representative; four plaintiffs act for owners of another 127 homes.

[2] Carter Holt seeks particulars for many aspects of the claim. The plaintiffs have already provided Carter Holt some. They resist the balance. Carter Holt also seeks security for costs until discovery is complete. The plaintiffs offer $145,000 until then. Carter Holt seeks more than $1.1 million. The difference lies not in principle; rather, cost of anticipated disbursements in relation to discovery.

The claim

[3] There are five causes of action: negligence, negligent failure to warn, negligent misstatement, breach of the Consumer Guarantees Act 1993, and breach of ss 9 and 13 of the Fair Trading Act 1986. In brief, the first three allege Carter Holt:

(a)Owed a duty of care to ensure Shadowclad was fit for purpose; a duty it breached by its ongoing manufacture, supply and promotion of Shadowclad.

(b)Knew or ought to have known Shadowclad was inherently defective, thereby requiring it to warn the plaintiffs.

(c)Made materially inaccurate promotional statements about Shadowclad.

[4] The fourth and fifth causes of action have similar elements, deployed in a consumer-protection framework. As observed, Carter Holt denies the allegations. It raises limitation defences too.

1 Carter Holt.

Particulars

[5]The parties agree on principle, just not how they bite.

[6] As Kos J memorably observed, particulars exist…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NZHC 478
Decision Date: 18 March 2019

CaseChat Overview and Summary

The case of Paine v Carter Holt Harvey Ltd involved a class action brought by homeowners against Carter Holt Harvey Ltd, the manufacturer and supplier of a plywood product called Shadowclad. The plaintiffs alleged that Shadowclad was inherently defective and that Carter Holt knew or ought to have known this. They sought damages for breach of duty of care, negligent failure to warn, negligent misstatement, and breaches of the Consumer Guarantees Act 1993 and the Fair Trading Act 1986. Carter Holt sought particulars for many aspects of the claim and security for costs until discovery was complete. The High Court of New Zealand considered the applications.

The court held that the plaintiffs' pleadings were sufficient and that the particulars requested by Carter Holt were not necessary at this stage. The court found that the plaintiffs had provided sufficient information to inform Carter Holt of the case against it, and that additional detail would be unnecessary and repetitive. The court also held that the plaintiffs' claim was primarily about an allegedly defective product, and that damage and loss must be viewed through this lens. The court considered that the claim was an obvious candidate for trial staging, in which there would be a preliminary trial to determine liability including, obviously, whether the plaintiffs can establish Shadowclad is inherently defective.

The court granted Carter Holt's application for security for costs until completion of discovery. The court held that the correct categorisation was 3C, as the case was complex and difficult arguments and decisions lay ahead. The court also held that Carter Holt's estimate of $250,000 for discovery was about right, and that $200,000 was a reasonable estimate for expert witnesses until completion of discovery. This produced security of $614,000, a figure roughly halfway between the parties.

Finally, the court ordered a case management conference within the next six weeks.

Orders