Tierney v Earthquake Commission

[2014] NZHC 2941

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001272 [2014] NZHC 2941

BETWEEN

MICHAEL TIERNEY AND FIONA

TIERNEY Plaintiff

AND

THE EARTHQUAKE COMMISSION First Defendant

AND

VERO INSURANCE NEW ZEALAND LIMITED

Second Defendant

Hearing:	24 November 2014 (On the papers)
Appearances:	AJD Ferguson for Plaintiffs No appearance for First Defendant G J Jones and T J Wood for Second Defendant
Judgment:	24 November 2014

JUDGMENT OF DUNNINGHAM J

ON INTERLOCUTORY APPLICATIONS FOR: A.  Particular discovery;

B.  Leave to file a statement of defence after close of pleadings; and

C.  Extension of scheduled hearing length.

[1]      The Court has received the following interlocutory applications:

(a)       application by the second defendant to file statement of defence after close of pleadings;

(b)application by first defendant to file statement of defence after close of pleadings;

TIERNEY v THE EARTHQUAKE COMMISSION AND ANOR [2014] NZHC 2941 [24 November 2014]

(c)       application  by  second  defendant  for  particular  discovery  (with associated application for leave to file this application).

[2]      The application for particular discovery is opposed by the plaintiffs. The first

defendant supports the second defendant’s applications.

[3]      The first defendant also seeks an extension to the allotted fixture duration. The hearing is currently scheduled for four days, but both the first and second defendant, consider that up to 15 days should be scheduled.  The plaintiffs consider that only five days are required.

[4]      I will deal with each of these matters in turn.

Leave to file statement of defence to first amended statement of claim

[5]      In a minute dated 8 September 2014, I directed that the date for close of pleadings was 26 September 2014.  The second defendant’s statement of defence to the plaintiffs’ first amended statement of claim was provided electronically to the Court and to the parties on 26 September 2014, and was filed in hard copy on

30 September 2014.  It seeks leave to file that statement of defence after the close of pleadings.

[6]      Similarly, the first defendant seeks leave to file a statement of defence to the plaintiff’s first amended statement of claim after the close of pleadings.  It provided the  statement  of  defence  electronically  to  the  Court  and  to  the  parties  on

10 October 2014 and filed a hard copy subsequently.

[7]      Both defendants say that given the small degree of non-compliance and the fact that the trial is not until 9 March 2015, no prejudice arises to any party and it is in the interests of justice to grant leave.   The first defendant also says that the changes   are   generally   in   the   nature   of   paragraph   reordering   and   similar administrative amendments in order to respond to the new paragraph references and allegations in the amended statement of claim.

[8]      No opposition was filed by the plaintiffs.

[9]      I accept that given the minor nature of the non-compliance and the length of time to trial, no prejudice arises to any party.  Accordingly, leave is granted to both the first and second defendants to file statements of defence to the first amended statement of claim after close of pleadings.

Second defendant’s application for particular discovery

[10]     The second defendant seeks orders that:

1.2The plaintiffs within 7 working days file and serve an affidavit of documents complying with High Court Rules 8.15 and 8.16 stating in relation to the documents described in schedule A:

(a)       Whether the documents are in their possession or control or have been in their possession or control;

(b)      If they have been, but are no longer, in the plaintiffs’ control, their best knowledge and belief as to when the documents ceased to be in their control and the persons who now have control of them.

1.3      If  the  documents  are  in  the  plaintiffs’  control  to  make  those

documents available for inspection.

1.4The plaintiffs file and serve on the parties to this proceeding an affidavit   individually   listing   and   sufficiently   describing   the documents in Schedule B;

1.5      The plaintiffs to pay the second defendant’s costs of this application.

[11]     The  application  was  supported  by  a  detailed  affidavit  identifying  the documents which the second defendant believes exist, but which have not been discovered or provided by the plaintiffs pursuant to the tailored discovery orders made on 20 September 2013.

[12]     Eleven categories of documents are requested.   The first five relate to the renovations being undertaken by the plaintiffs to their home prior to the Canterbury earthquakes.  The balance of the requests are for identified documents, or categories of documents, which it appears should exist from the content of the documents which have already been discovered.

[13]     The  second  aspect  of  the  application  relates  to  part  2  of  the  plaintiffs’ affidavit  of  documents,1   being  the  documents  in  relation  to  which  privilege  is claimed.   In part 2 the documents are globally described, in one entry, as being “various” documents authored by “Shand, Tierney, Claims Resolution Services”, or received by one of those three parties, on “various dates” and where either legal professional privilege or litigation privilege is claimed.

[14]     The second defendant says it has asked the plaintiffs to clarify its relationship with “Claims Resolution Services” and to provide sufficient details of the privileged documents relating to “Claim Resolution Services” to enable the second defendant to assess those privilege claims.

[15]     The first defendant supports the second defendant’s application, both on the basis that the plaintiffs have not discovered one or more documents or category of documents  which  should  have  been  discovered  in  accordance  with  the  Court’s tailored discovery order and because the documents listed in the second part of the plaintiffs list of documents are not sufficiently described to enable an assessment of each claim of privilege.

[16]     The plaintiffs oppose the application.  The grounds for opposition are more fully set out in an affidavit of Mr Tierney received on 19 November 2014.

[17]     In  relation  to  the  four  requests  for  documents  relating  to  the  home’s renovation, including plans, invoices, quotes and communications with public authorities such as the relevant council, the plaintiffs assert that there are no documents fitting within these descriptions to discover.

[18]     In relation to the other specific requests, the plaintiff says, in summary:

(a)       the insurance broker’s file has been requested but has not yet been

provided to his solicitor;

1      But referred to as “Schedule B” in the application.

(b)the attachments which were sent with the plaintiffs’ solicitor’s letter to the Earthquake Commission have either already been discovered by one of the other parties or “have little value/relevance to this proceeding”.   It appears, however, from the plaintiffs’ affidavit that the attachments identified by the letters N, P, Q, and R are held by the plaintiffs and should be made available for inspection.

[19]     Similarly, with the balance of the identified categories of documents, the plaintiffs say either that these have already been discovered, (including by another party to the proceedings), or they do not exist (for example, marked up drawings prepared by Zoran Rakovich) or they are irretrievable (for example, photographs held on a faulty hard drive).  The only document which does appear to be held by the plaintiffs  is  a  letter  from  Selwyn District  Council  dated  7  October  2013.    The plaintiffs assert it is irrelevant to the proceedings, but do not say why.

[20]     While it seems surprising to learn that so few documents are available, in particular in relation to the plaintiffs’ house renovations, Mr Tierney’s response is provided by sworn affidavit and accordingly, I rely on it.  It has identified which of the requested documents do exist, and which may not have yet been made available to the defendants.   The provision of an affidavit makes a further affidavit of documents  unnecessary.    However,  inspection  of those  documents  does  need  to occur.

[21]     Accordingly, I direct that the plaintiffs make available to the first and second defendants, for inspection:

(a)       the documents on the insurance broker’s file relating to the condition

of the home and the extent of the renovation works being undertaken;

(b)the attachments sent with the letter the plaintiffs’ solicitor sent to the Earthquake Commission on 20 July 2012, which are identified by the letters N, P, Q, and R;

(c)      the letter from Selwyn District Council dated 7 October 2013 on the basis that it is not clear why, if it falls within the requested category (h), it is irrelevant to the proceedings.

[22]     The second aspect of the discovery application related to the non-compliance with High Court r 8.16, when listing the documents in which privilege was claimed.

[23]     High  Court  r  8.16(3)  requires  the  description  of  documents  for  which privilege is claimed to be “sufficient to inform the other parties of the basis on which each document is included in a group under sub clause (2)”.  Sub clause (2) of r 8.16 allows documents of the same nature to be described as a group or groups.

[24]     As was said in Vanda Investments Ltd v Logan,2 r 8.16 is “clearly an intended means of guarding against situations where a default rule requiring description of documents might become oppressive”, but nevertheless, it should follow an acceptable form of identification,3 in order to inform the recipient of the list of why that particular privilege is claimed in respect of that category of documents.

[25]     I do not  accept that the documents,  as currently described,  comply with r 8.16.  Mr Tierney’s affidavit does not elucidate matters.  He simply says:

In my affidavit of documents I asserted privilege over correspondence between the plaintiffs, my lawyers and the Claims Resolution Services.

This was intended to extend to communications between the plaintiffs and our  solicitor  that  was  copied  into  Claims  Resolution  Services  or  where Claims Resolution Services were acting as the agent for our solicitors.

That explanation does not make it any clearer as to which privilege is claimed, in relation to which category of documents.

[26]     I consider, at the least, the date ranges for each category of documents should be identified (as that may be relevant to whether litigation privilege can properly be

claimed) and the categories of documents should be separated out into documents for

2      Vanda Investments Ltd v Logan HC Dunedin CIV-2009-412-219, 27 November 2009.

3      For example, see that cited at [53] of Vanda Investments.

which legal professional privilege is claimed and documents in respect of which litigation privilege is claimed.

[27]     I do note, however, that in the plaintiffs’ notice of opposition, they have acknowledged that “the manner in which the plaintiffs expressed which documents they claimed privilege over may have caused confusion” and assert that this has “since been clarified with the second defendant” and that the only documents over which  privilege  is  claimed  are  documents  containing  communications  between lawyer and client.  This calls into question the utility of requiring a further affidavit from the plaintiffs. Accordingly, I make no orders at this stage, on the understanding that the basis for claiming privilege has, or shortly will be, clarified informally.

[28]     I reserve leave to the second defendants to seek a formal order directing the filing of a complying affidavit, if clarification is not achieved on an informal basis.

Scheduled hearing length

[29]     The  first  defendant  has  raised  the  issue  of  the  sufficiency  of  scheduled hearing time.   At present, the plaintiffs anticipate calling six witnesses, the first defendant three witnesses and the second defendant three witnesses.  However, the first defendant says there is also a strong likelihood that this number will increase because of the need to call Geotechnical evidence to inform or support the evidence of the structural engineering experts.

[30]     Furthermore, given the time it is taking to hear other earthquake related cases (for example, C & S Kelly Properties Limited v Earthquake Commission and Others, CIV-2013-409-1273 which was originally allocated five days for hearing but has now been allocated a further 10 days to hear 20 witnesses), it is likely that 15 days will be needed to complete the hearing of the case.

[31]     That position is endorsed by counsel for the second defendant who notes that the amended statement of claim introduces two new issues which will significantly increase the length of the trial and will increase the number of factual witnesses that the second defendant will need to call.   For these reasons, the second defendant

agrees that the hearing will not be fully heard in four days and considers that at least

10 days will be required, but possibly 15 days as suggested.

[32]     Counsel for the plaintiffs say that the main reason the C & S Kelly trial did not conclude after five days was that the defendant “changed their case when they served their briefs which substantially altered their case”.  He says that the time for this hearing should be extended to five days.

[33]     Having considered the pleadings, the number of witnesses being called, and the likelihood of extensive cross-examination on factual issues where those cannot be resolved by contemporaneous documents, I am of the view that this hearing cannot  be  completed  in  five  days  but  will  require  approximately  10  days  to complete.  I would expect that if 10 days are allocated, the parties should be able to co-operate to ensure the hearing can be completed in that time.

[34]     Unfortunately, though, the hearing date scheduled for 9 March cannot be extended  beyond  five  days,  and  a  10  day  fixture  cannot  be  allocated  until

31 August 2015.  If counsel were prepared to accept a back up date, on four to six

weeks’ notice, there may be an alternative date available commencing 22 June 2015.

[35]     Accordingly,  the  current  four  day  fixture  commencing  9  March  2015  is vacated.     A  new  fixture  is  to  be  scheduled  for  10  days,  commencing  on

31 August 2015.  Counsel are to advise the High Court Registry promptly whether the earlier date can be scheduled in as a back up fixture.

[36]     Costs on this application are reserved, but discouraged, particularly given that the grant of leave is a form of indulgence and the discovery issues have largely resolved themselves.

Solicitors:

G Shand, Christchurch

Chapman Tripp, Wellington

Jones Fee, Auckland