Penley Limited v Attorney-General - [2020] NZHC 2601

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;…

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: [2020] NZHC 2601
Decision Date: 2 October 2020

CaseChat Overview and Summary

Penley Limited (Penley) sought to recover the cost of remediation work undertaken on land previously occupied by Aorangi School. The land had been sold to Penley by the Crown (Attorney General). The remediation work was required because asbestos-containing material (ACM) had been spread across the land during earthworks undertaken by Texco Excavating Ltd (Texco). Penley commenced proceedings against the Attorney General. The Attorney General sought to join Texco as a third party and to make orders for further discovery against Penley. The issues were whether Texco should be joined as a third party and whether Penley should provide further discovery. The court found Texco should be joined as a third party because the interests of justice favoured it. The court also found Penley should provide particulars of the remediation costs claimed and identify the discovered documents supporting the claim.

Orders