Penley Limited v Attorney-General
[2020] NZHC 2601
•2 October 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2017-409-000431
[2020] NZHC 2601
BETWEEN PENLEY LIMITED
Plaintiff
AND
ATTORNEY GENERAL
First Defendant
AND
ELIOT SINCLAIR & PARTNERS
Second Defendant
Hearing: 7 September 2020 Appearances:
C A McVeigh QC for Plaintiff
A Isac QC and K Anderson for First Defendant J Forsey for Second Defendant
Judgment:
2 October 2020
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 2 October 2020 at 5.45 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
PENLEY LTD v ATTORNEY GENERAL [2020] NZHC 2601 [2 October 2020]
The applications
[1] Penley Ltd (Penley) purchased from the Crown a property which had been the Aorangi School. It developed the property for residential purposes. Texco Excavating Ltd (Texco) was engaged to undertake earthworks. The second defendant was engaged to complete a site investigation and to project manage the works. Asbestos Containing Material (ACM) was discovered and Penley completed remediation work.
[2] Penley wishes to recover the cost of the remediation work from the defendants. Penley considers it also has a claim against Texco but it is unable to claim directly against Texco in this proceeding because its contractual arrangements include a compulsory arbitration clause.
[3] This judgment concerns an application by the Attorney-General (the first defendant) for orders:
(a)granting leave to join Texco as a third party; and
(b)that Penley provide particular discovery.
[4]Both applications are opposed by Penley.
Background
[5]Penley is owned by members of the Williams family.
[6] In the 1950s the Crown acquired land at Bryndwr from Frederick Charles Williams, a tomato grower, for use as Aorangi School. Mr Williams had glasshouses on the land which were removed and the school was built.
[7] In around 2010, Aorangi School was declared surplus. The school closed and the school buildings were removed.
[8] In 2014, the Crown offered the land to Frederick Williams’s grandson under the Public Works Act 1981. The offer-back was accepted. Penley was nominated to
complete the purchase. The sale agreements were conditional on due diligence investigations.
[9] Penley engaged the second defendant to investigate if there was any soil contamination. None was identified.
[10] Penley declared the agreements unconditional and settled the purchase on 30 June 2014. It then engaged Texco to undertake earthworks and the second defendant to manage the works.
[11] The earthworks began in around May 2015. The land was stripped and soil stockpiled. A large amount of fill was brought on to the site. Significant earthworks were undertaken before, on 6 November 2015, an employee of the second defendant observed asbestos. By 17 November 2015, it was apparent that ACM had been spread across a large area.
[12] The source/s of the ACM is disputed and can only be resolved at trial. There are at least four possible sources:
(a)the glasshouses;
(b)the school buildings;
(c)by transfer of contaminated fill from a contiguous property developed around the same time by Kingfield NZ Ltd; and
(d)by contaminated fill imported onto the land as part of the earthworks.
[13] Regardless of the source/s of the ACM, Texco was involved in mixing it throughout the soil and then spreading it across the property.
[14]Penley undertook remediation work which, it says, cost $1,300,000.
[15] Penley wrote letters to both Texco and the second defendant claiming Texco failed to identify the presence of the ACM and increased the cost of remediation by spreading it widely across the property.
[16] Penley filed this proceeding in June 2017, initially only against the first defendant, to avoid the expiry of a limitation period.
[17] In August 2017, Penley’s solicitors wrote to Crown Law asking whether, consistent with the terms of its arrangements with Texco and the second defendant, the first defendant would agree to resolution of the dispute by mediation/arbitration involving all parties. Crown Law advised that the first defendant would not engage in mediation or arbitration.
[18] On 20 December 2017, Penley gave notice of a dispute under the contract between it and Texco concerning Texco’s performance of the earthworks contract. Penley alleged Texco should have identified the ACM at an earlier stage and immediately ceased work but instead mixed the ACM throughout the soil and spread it over large parts of the property.
[19] On 13 February 2018, Penley’s solicitors wrote to Texco asking it to agree to becoming a party to this proceeding. Texco refused. Penley and Texco have paused any arbitration between them pending resolution of this proceeding.
[20] In Penley’s second amended statement of claim (its latest pleading) it pleads, as against the first defendant, causes of action for contractual misrepresentation, contractual mistake, breach of the Fair Trading Act 1986, negligence and breach of statutory duty.
[21] In respect of all causes of action, Penley seeks to recover $1,300,000 which is the cost of the remediation works.
Leave to join a third party (Texco)
Legal principles
[22]The first defendant requires leave of the court to join Texco as a third party.1 Rule 4.4 of the High Court Rules 2016 provides:
4.4 Third parties
(1)A defendant may issue a third party notice if the defendant claims any or all of the following:
(a)that the defendant is entitled to a contribution or an indemnity from a person who is not a party to the proceeding (a third party):
(b)that the defendant is entitled to relief or a remedy relating to, or connected with, the subject matter of the proceeding from a third party and the relief or remedy is substantially the same as that claimed by the plaintiff against the defendant:
(c)that a question or issue in the proceeding ought to be determined not only between the plaintiff and the defendant but also between –
(i) the plaintiff, the defendant, and the third party; or
(ii) the defendant and the third party; or
(iii) the plaintiff and the third party:
(d)that there is a question or an issue between the defendant and the third party relating to, or connected with, the subject matter of the proceeding that is substantially the same as a question or an issue arising between the plaintiff and the defendant.
(2)A third party notice must be issued within –
(a)10 working days after the expiry of the time for filing the defendant’s statement of defence; or
(b)a longer time given by leave of the court.
(3)A third party notice may be issued only with the leave of the court if an application for judgment is pending under rule 12.2 or 12.3.
[23] Even if one or more of the grounds for issuing a third party notice is made out the grant of leave is at the discretion of the court.
1 High Court Rules 2016, r 4.4(2)(b).
[24]Rule 4.8 provides:
4.8 Court’s power and discretion
(1)On an application seeking leave to issue a third, fourth, or subsequent party notice, the court must have regard to all relevant circumstances, including delay to the plaintiff.
(2)On the making of an application of that kind, the court may grant or refuse leave or grant leave on just terms.
[25] Underlying applications to join third parties is the principle that all persons potentially responsible for a loss should be parties and present in the same action and at the same trial. The principle is supported by two main considerations: practicality and justice. The latter is the overarching consideration.2 In Turpin v Direct Transport Ltd Cooke J observed, “[u]ltimately the determining considerations seems [sic] to be to me the requirements of justice to all parties and a reasonably speedy and convenient resolution of all issues.”3
[26] Counsel agree the general principles applying to joinder applications can be found in Westwood Group Holdings Ltd v Rilean Construction (South Island) Ltd:4
(a)The defendant’s claim against the third party must be covered by one of the four grounds set out in r 4.4(1). A defendant may join the third party as of right within the time limit set down in r 4.4(2)(a). An application outside this time limit requires leave of the Court (r 4.4(2)(b)).
(b)Where leave is sought, the Court must consider firstly whether one of the grounds in r 4.4(1) exists and secondly whether to exercise its discretion to join the third party: ANZ Banking Group (NZ) Ltd v Dairy Containers Ltd.
(c)In exercising its discretion, the Court must have regard to all relevant circumstances, including delay to the plaintiff (r 4.8).
(d)The interest of justice between all parties, however, is paramount. While any delay to the plaintiff is regrettable, the attainment of justice by the most efficient means is an overriding consideration: KPMG Peat Marwick v Cory-Wright & Salmon Ltd (in rec and liq).
(e)Where the defendant has not been guilty of unreasonable delay, a factor in favour of exercising the discretion will be whether the defendant
2 Heale v IAG New Zealand Ltd [2019] NZHC 2829 at [17]-[18].
3 Turpin v Direct Transport Ltd [1975] 2 NZLR 172 (SC) at 176.
4 Westwood Group Holdings Ltd v Rilean Construction (South Island) Ltd [2013] NZHC 1739 at [15].
could have joined the third party as of right if it had applied within the time limit: ANZ Banking Group (NZ) Ltd v Dairy Containers Ltd.
(f)Equally, unexplained or unacceptable delay by the defendant may result in leave being refused: Meroiti v National Australia Finance Ltd.
(g)In cases of serious delay that risk prejudicing the plaintiff, the court may be prepared to make an order for joinder on conditions designed to preserve the hearing date for the plaintiff’s claim against the defendant: Total Air Supply Company Ltd v Total Air Supply Company (2007) Ltd.
(h)Avoiding duplicity of proceedings and preventing the same question being tried with different results militate in favour of allowing the application. The overriding purpose of the third party rules is to enable all the issues to be dealt with in one action: Turpin v Direct Transport Ltd.
(i)There is, however, a need to strike a balance between all the parties’ interests. The extent to which the plaintiff is necessarily involved in the issues between the defendant and the third party is a consideration. Equally, it can be oppressive and unjust to involve a third party in a proceeding where much of the proceeding will not involve that third party.
(j)The Court may have regard to the relative strengths and weaknesses of the parties’ cases, including the case against the proposed third party and the likelihood of recovery: Dairy Containers Ltd v NZI Bank Ltd.
(footnotes omitted)
[27] With regard to delay, the court should be forward-looking. What matters is the prospect of future delay.5 In Nissan Datsun Holdings Ltd v R Savory Ltd, Smellie J said: 6
It is a question of weighing the respective interests of the parties and in this case comparing the prejudice of delay and possible escalation of issues to be argued so far as the Plaintiff is concerned against the danger faced by the Defendant of having to conduct two trials with possible inconsistent results.
Submissions
First defendant
[28] The first defendant relies principally upon r 4.4(1)(a) of the High Court Rules. He argues he is entitled to a contribution from Texco as a joint tortfeasor under the Law Reform Act 1936 or to make a claim against Texco for equitable contribution.
5 TSB Bank Ltd v Burgess [2013] NZHC 1228 at [38](e).
6 Nissan Datsun Holdings Ltd v R Savory Ltd HC Auckland A336/84, 7 October 1986 at 4.
[29] The right to contribution is derivative of a claim by the plaintiff and Penley has given notice of its intention to make a claim against Texco. The critical point, Mr Isac submits, is that Penley has claims against both the first defendant and Texco in respect of the same damage.
[30] Mr Isac contends there are critical issues which need to be examined at trial involving Texco which are:
(a)how the ACM got onto the land;
(b)why there was a failure to identify the ACM sooner;
(c)the uncovering and spreading of the ACM over the land; and
(d)the steps taken to remediate the land.
[31]He submits that it is efficient to join Texco because:
(a)unless joinder is ordered there could be as many as three sequential proceedings involving the same parties and the same underlying factual issues;
(b)joinder is likely to resolve all issues between the four parties in a single hearing;
(c)without joinder there is a very real prospect of irreconcilable decisions in the several proceedings that relate to this dispute;
(d)Texco will not be sitting idly by for much of the hearing as its actions are central to the rights and entitlements of all parties;
(e)if Texco is not joined and Penley cannot discover relevant documents held by Texco an application for third party discovery will be needed; and
(f)getting all the parties together increases the prospects of settlement.
[32] As far as delay is concerned, Mr Isac argues there has been no meaningful prejudice to Penley from any delay in the first defendant applying to join Texco. He says, the first defendant needed time to consider whether joinder could be responsibly pursued, and adjournments in the proceeding to date have often been at the request of Penley. He further submits there is no such prejudice going forward because briefs of evidence have not been exchanged, the pleadings need to be amended, there is no third party discovery undertaken and a trial date will not be available for many months.
Penley
[33] Mr McVeigh argues that the first defendant has no right to contribution from Texco as the first defendant and Texco are not liable to Penley in respect of the same damage.
[34] Penley’s main concern is delay. Mr McVeigh acknowledges such delays as have occurred to date are as to be expected in litigation but emphasised that it has been over two years since the first defendant should have applied to join Texco.
[35] Mr McVeigh submits that joining Texco is not going to improve Penley’s position as far as obtaining an early trial is concerned. Whilst the court may offer case management to avoid delay, there is a large degree of optimism about that, particularly as Texco has made it clear it has no intention of cooperating.
[36] Mr McVeigh argues the first defendant exaggerates Texco’s role. He challenges the first defendant’s contention that ACM may have been brought onto the property by Texco. He argues that Texco will spend a good part of the hearing sitting around idly while issues affecting only the first and second defendant are canvassed.
[37] Mr McVeigh does not accept that joining Texco will avoid multiple proceedings. In any event, if the court refuses to join Texco the first defendant is not without a remedy and may bring its own proceeding against Texco.
[38] He submits the possibility of inconsistent decisions is overstated as the court will be astute to ensure there is no inappropriate and abusive re-litigation of issues which, in substance, have been determined in other related proceedings.7
Discussion
[39]I consider r 4.4(1)(a) is engaged.
[40] The entitlement to contribution, whether under s 17(1)(c) Law Reform Act or on equitable principles, is based on liability to a common demand for the same damage.
[41]In Hotchin v New Zealand Guardian Trust Company Ltd Elias CJ said:8
[152] … Contribution is an equitable principle which expresses natural justice in its recognition that it is unjust for the burden of meeting a loss for which others share responsibility to be borne by one party, to the benefit of those who escape liability. The obligations need not be identical in their source or extent. Nor is it necessary that they have the same legal character. It is enough that the responsibility for the harm is shared. This is an inquiry that is practical and directed at the substance of the matter in the particular case. Although the basis on which contribution is made has often been elaborated in “particular pockets of doctrine” (such as in respect of co-insurance, co-sureties, and trustees), as Kirby J noted in Burke v LFOT Pty Ltd, the cases rest on more general principles of justice.
[153] I consider that the statutory requirement of liability for the “same damage” adopted in s 17(1)(c) of the Law Reform Act, reflects the principles of the common law of contribution, from which it was derived. “Coordinate liability” in this context is liability for the same harm. It is sufficient for contribution if parties are liable to another person in respect of the same damage. On that view, the reform achieved by s 17(1)(c) and its predecessors was simply to remove the impediment formerly presented by Merryweather v Nixan, leaving the principles on which contribution is based equally applicable whether contribution falls within s 17(1)(c) or the common law.
[42] Mr McVeigh argues the first defendant and Texco are not liable to Penley for the same damage. Penley’s claim against the first defendant is, he argues, based on entering into a contract to purchase the property that was worth less than what was paid for it. While the measure of damages is the remediation cost, the claim could be
7 Montgomery Watson NZ Ltd v Milburn NZ Ltd HC Christchurch CP86/00, 9 October 2000 at [35].
8 Hotchin v New Zealand Guardian Trust Co Ltd [2016] NZSC 24, [2016] 1 NZLR 906 at [152]- [153].
(and may be) advanced on a different basis by producing valuation evidence. On the other hand, Texco’s liability is for physical loss caused by spreading ACM over the land. I do not accept that analysis.
[43] It does not matter that Penley’s causes of action against the first defendant and Texco are not the same or that liability arose under different circumstances. The damage Penley has suffered is physical damage to the land due, initially, to the presence and then the mixing and spreading of ACM throughout the soil. While the first defendant was not involved in the spreading and mixing of the ACM, Penley considers it is liable for the full cost of the remediation work because it failed to ensure that any ACM was removed prior to sale. On this basis, the first defendant will be said to have created the circumstances under which the ACM was later mixed and spread. Importantly, however, Penley does not contend that the liability of the first defendant and Texco are truly alternative. There is no suggestion that any liability Texco is found to have to Penley will limit the liability of the first defendant. To the contrary, Penley holds the first defendant liable for its entire loss regardless of Texco’s liability. In such a case, a claim for contribution as between the first defendant and Texco is available.9
[44] The next issue is whether the court should exercise its discretion to join Texco. I consider that the interests of justice favour making an order of joinder.
[45] If Texco is joined the contribution issues between the first defendant and Texco (and potentially the second defendant also) can be resolved without further proceedings.
[46] The risk of inconsistent findings concerning Texco’s liability to Penley in later proceedings between the parties is avoided even if Penley has no direct right of action against Texco in this proceeding.
[47] If Texco is a party, discovery issues between the parties that are presently outstanding may be resolved without the need for third party discovery. The court will
9 Hotchin v New Zealand Guardian Trust Co Ltd, above n 8, at [220] and [225]-[228] per William Young J.
likely have at trial evidence from Texco thereby avoiding the risk that it is forced to make factual findings without relevant documents and witnesses.
[48] There is also, in my view, a greater likelihood of a final resolution by settlement if all potentially liable parties can be brought to the negotiating table. At the present time, Texco stands apart with no incentive to be involved in any settlement discussions.
[49] Penley’s major concern is delay. Mr McVeigh is correct that Texco may apply to set aside the third party notice. This could, potentially, cause delay. Much of the force of the argument is lost when one considers the case is not yet ready for trial. Discovery is ongoing, no close of pleadings date has been allocated, amendments to the pleadings are likely, briefs of evidence have not been exchanged and, no trial date has been given.
[50] Notwithstanding Mr McVeigh’s reservations, case management is, the parties being willing, effective to avoid delays. Furthermore, even if the case was set down for hearing immediately it would be many months (and likely well over a year) before trial. There is plenty of time to deal with interlocutory issues without affecting the commencement date of trial.
[51] In his affidavit in opposition to this application, Penley’s director, Paul Williams, speaks of prejudice to Penley as a result of joining Texco. Such prejudice appears to be limited to unspecified “unwarranted expense” and delay in the resolution of the proceeding. There is a strong case that joining Texco will reduce Penley’s costs. While Texco has a right to insist that issues between it and Penley are determined at arbitration, if Texco is made a party the resolution of issues in arbitration will be greatly simplified and, as noted, the possibility of settlement enhanced. For reasons I have already given, the joinder of Texco should not delay the hearing.
[52] I do not consider it would be oppressive to involve Texco in this proceeding. Texco was directly involved in unearthing ACM, mixing and spreading it over the property, and in the subsequent remediation. These are central matters to be considered at trial. There are issues that arise that do not involve Texco but they are,
to my mind, largely legal issues concerning the contractual arrangements between Penley and the Crown. Further, it can reasonably be expected that Texco will need to deal with the same issues raised in this proceeding in the future given the dispute raised by Penley against it.
[53] Ultimately the court is required to weigh the competing arguments and interests of the parties. Where the attainment of justice by the most efficient means is the overriding consideration, I consider Texco should be joined as a third party.
Further and better discovery
The orders sought
[54] The first defendant seeks particular discovery from Penley in relation to certain groups of documents. Originally further discovery was sought of seven categories of documents. Following the hearing, counsel for the first defendant filed a memorandum that states, while reserving its position to renew its application against Penley, if Texco is joined as a party the first defendant’s application can be reduced in scope to the following documents:
1Documents relevant to the earthworks carried out on the site by the plaintiff or its agents or contractors (including Texco) before and after the discovery of ACM in November 2015, including:
…
(g) Papers relating to the relationship between Texco, Kingfield New Zealand Ltd (and/or Ngai Tahu), and Penley, and the development of the adjacent land which was sold by the first defendant to Ngai Tahu and was developed at the same time as Penley’s site by Texco.
…
3Any earthworks or stormwater resource consents for the development which contain conditions relating to monitoring and inspections of the earthworks, as well as any sediment control plan, and all notes or records relating to site inspections required under any resource or building consents.
4Documents relevant to establishing the quantum of damages sought (namely the cost of remediating the plaintiff’s property), including receipts, invoices, quotes, records of the disposal volumes or weights of soil or earth removed, records of the transport and landfill disposal rates, all professional fees relevant to the remediation.
5Documents relating to the sale of the sections on Maelor Place and Colwyn Street by the plaintiff following the completion of the subdivision of the relevant land, including any and all valuations, appraisals and sale and purchase agreements.
[55] I convened a teleconference with counsel on 2 October 2020 in relation to categories 3 and 4. I will address what was discussed below.
[56] The application for further discovery is opposed by Penley on a plethora of grounds as follows:
(a)some of the documents have been discovered;
(b)some of the documents are not in Penley’s control;
(c)the documents are not relevant;
(d)the application is oppressive;
(e)the order sought is disproportionate; and
(f)the order sought would require an unreasonable search.
The rules and the principles
[57] The parties were ordered to give standard discovery. This required them to disclose documents that are, or have been, in their control and that are documents upon which they rely, documents that adversely affect their case or documents that adversely affect another party’s case.10 The order required disclosure of documents of actual and direct relevance.11 Relevance is usually to be assessed according to the pleadings.12
10 High Court Rules, r 8.7.
11 McGechan on Procedure (online ed, Thompson Reuters) at [HR8.7.01].
12 Robert v Foxton Equities Ltd [2014] NZHC 726, [2015] NZAR 1351 at [8]; New Zealand Rail Ltd v Port Marlborough New Zealand Ltd [1993] 2 NZLR 641 (CA) at 644.
[58] A party must make a reasonable search for documents within the scope of a discovery order.13 What constitutes a reasonable search will vary according to context. Relevant factors are the nature and complexity of the proceeding, the number of documents, the ease and cost of retrieving them and their significance.
[59] Discovery must be proportionate to the subject matter of the proceeding. Proportionality involves a balancing of the time and cost of making discovery against the potential value of discovery.14
[60] Rule 8.19 of the High Court Rules allows the court to make a further order for particular discovery against a party where it appears there are grounds for believing a party has not discovered document(s) “that should have been discovered”.
[61]Rule 8.19 provides:
8.19Order for particular discovery against party after proceeding commenced
If at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered 1 or more documents or a group of documents that should have been discovered, the Judge may order that party—
(a)to file an affidavit stating—
(i) whether the documents are or have been in the party’s control; and
(ii) if they have been but are no longer in the party’s control, the party’s best knowledge and belief as to when the documents ceased to be in the party’s control and who now has control of them; and
(b)to serve the affidavit on the other party or parties; and
(c)if the documents are in the person’s control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.
13 High Court Rules, r 8.14. McGechan on Procedure, above n 11, at [HR8.14.02] citing NSK Ltd v General Equipment Co Ltd [2015] NZHC 1979 at [24]; RHH Ltd v Anderson [2018] NZHC 2032 at [36] and Weir v Eini [2020] NZHC 465.
14 NSK Ltd v General Equipment Co Ltd, above n 13, at [21] citing Karam v Fairfax New Zealand Ltd [2012] NZHC 887 at [137]-[142].
[62]In Lighter Quay Residents’ Society Inc v Waterfront Properties (2009) Ltd,
Katz J stated the relevant principles applying to r 8.19 as follows:15
(a)Existence of the document does not have to be established on the balance of probabilities or a “more likely than not” basis. A lower threshold is required, which may vary given the relevance of the documents and issues of proportionality.
(b)While there is a presumption that affidavits of documents filed are conclusive, an application under r 8.19 is a proper way to circumvent the conclusiveness rule. The party seeking further discovery has to establish that the existing affidavit of documents is incomplete.
(c)Whether a document “should have been discovered” should be determined by reference to the “adverse documents” test in r 8.7, or any stricter test imposed under tailored discovery pursuant to r 8.8.
(d)A four‐stage approach is convenient:
(i)Are the documents relevant, and if so how important will they be?
(ii)What are the grounds, and what is the probative value of those grounds, for the belief that the documents sought exist?
(iii)Is discovery proportionate?
(iv)Weighing and balancing these matters, is an order appropriate?
[63] The starting position is that the affidavits of documents filed are conclusive of the discoverable documents in the parties’ control. The onus is on the party seeking particular discovery to show incompleteness.16 A party will not be required to embark on a search for documents that is likely to be hopeless and a waste of time.17
Discussion
Category 1(g) - Papers relating to the relationship between Texco, Kingfield New Zealand Ltd (and/or Ngāi Tahu), and Penley, and the development of the adjacent land which was sold by the first defendant to Ngāi Tahu and was developed at the same time as Penley’s site by Texco
[64] A neighbouring property was sold by the Crown to Ngāi Tahu and developed by Kingfield at around the same time as Penley developed its property. There appears
15 Lighter Quay Residents’ Society Inc v Waterfront Properties (2009) Ltd [2017] NZHC 818 at [16] and see also Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600.
16 Peguero v Jess [2019] NZHC 3188 at [24].
17 NSK Ltd v General Equipment Co Ltd, above n 13, at [21] citing Karam v Fairfax New Zealand Ltd [2012] NZHC 887 at [137]-[142].
to have been no hard barrier between the two properties. There are references in reports to samples being taken from stockpiles on Kingfield’s property and analysed containing ACM.
[65] The first defendant submits the source of the ACM could have been school buildings which were largely situated on Kingfield’s property. It also submits that the documents discovered suggest remediation work was undertaken on both properties and the extent to which the costs of that are included in Penley’s claim are unclear. For that reason, documents concerning the relationship between Penley, Texco and Kingfield are sought.
[66]Penley’s director, Paul Williams, has in his affidavit deposed:
Penley has never had any relationship with Kingsfield and does not have control (or possession) of any such documents, except that the timing of the sale from Ngai Tahu to Kingsfield is referred to in document P263 at pp 17- 18 already discovered. Otherwise, the Plaintiff questions the relevance of the material.
[67] I do not see anything that suggests a relationship between Penley and Kingfield concerning the development of Kingfield’s land nor anything to suggest Penley is claiming from the first defendant the costs to remediate Kingfield’s land. I have no reason not to accept Mr Williams’s evidence.
[68] The first defendant has not satisfied me that there are reasonable grounds for a belief that the documents sought exist or are in the control of Penley. I make no order in respect of this category.
Category 3 - Any earthworks or stormwater resource consents for the development which contain conditions relating to monitoring and inspections of the earthworks, as well as any sediment control plan, and all notes or records relating to site inspections required under any resource or building consents
[69] I raised with counsel during the 2 October 2020 teleconference that it appears Penley may have disclosed all resource consents. I referred Ms Anderson to the site validation report and document P449 in Penley’s second supplementary list of documents.
[70] Helpfully, Mr Forsey has sought further instructions from his client in relation to this category. He notes that any documents that have not been discovered in this category are more likely to be in the second defendant’s possession than in the possession of Penley.
[71] Counsel agree time should be provided for further consideration and submissions which I shall timetable.
Category 4 - Documents relevant to establishing the quantum of damages sought (namely the cost of remediating the plaintiff’s property), including receipts, invoices, quotes, records of the disposal volumes or weights of soil or earth removed, records of the transport and landfill disposal rates, all professional fees relevant to the remediation
[72]The first defendant’s difficulty is that he cannot reconcile Penley’s claim for
$1,300,000 with the discovered documents. The sum claimed has never been particularised.
[73] It appears Penley may not have discovered all relevant documents. Penley’s response to this request at exhibit F of Paul Williams’s affidavit of 19 May 2020 (page 287 of the common bundle) does not appear to fully address the request.
[74]Again, Counsel agree time is required to look into the matter.
Category 5 - Documents relating to the sale of the sections on Maelor Place and Colwyn Street by the plaintiff following the completion of the subdivision of the relevant land, including any and all valuations, appraisals and sale and purchase agreements
[75] The first defendant argues these documents are relevant to an assessment of Penley’s loss. For Penley, Mr Williams says the documents have been provided and refers to Colliers valuations listed in Penley’s affidavit of documents of 20 December 2020. Clearly the documents disclosed by Penley do not satisfy the first defendant’s request. There has been no disclosure of agreements for sale and purchase.
[76] However, I cannot see how such agreements can be relevant to an assessment of Penley’s loss. The agreements relate to sales of sections following the remediation of the land and completion of the subdivision. Penley had already suffered its loss at
that stage. On what is before me, I cannot presently see how the sale prices of the remediated sections are relevant to an assessment of Penley’s loss. I do not make any order in respect to this category.
Result
[77] The first defendant is granted leave pursuant to r 4.4(1)(a) of the High Court Rules 2016 to join Texco Excavating Ltd as the third party in this proceeding. The first defendant’s third party notice and statement of claim are to be filed within 10 working days and served upon Texaco Excavating Ltd as soon as reasonably practicable thereafter.
[78] In relation to the first defendant’s application for further discovery, I order as follows:
(a)in respect to categories 1(a)-(f), 2, 6 and 7, the application stands adjourned and may be bought on at the request of the first defendant;
(b)in respect to categories 1(g) and 5, the application is dismissed;
(c)in respect to categories 3 and 4, the application is adjourned on the following basis:
(i)in respect to category 3, the first defendant shall file any further submissions by 12 October 2020 and Penley shall have until 23 October 2020 to respond; and
(ii)in respect to category 4, Penley shall file any further submissions by 12 October 2020 and the first defendant shall have until 23 October 2020 to respond. Penley should provide particulars of the $1,300,000 claimed as well as specifically identifying the discovered documents supporting the claim.
[79] Costs are reserved. I will call for submissions once the discovery issues are resolved.
O G Paulsen Associate Judge
Solicitors:
C A McVeigh QC, Barrister, Christchurch Crown Law Office, Wellington
Duncan Cotterill, Christchurch
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