Waka Kotahi New Zealand Transport Agency v QBE Insurance (Australia) Limited

[2024] NZHC 1831

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-460

[2024] NZHC 1831

BETWEEN

WAKA KOTAHI NEW ZEALAND TRANSPORT AGENCY

Plaintiff

THE FLETCHER CONSTRUCTION COMPANY LIMITED

Second Plaintiff

BECA LIMITED

Third Plaintiff

HIGGINS CONTRACTORS LIMITED

Fourth Plaintiff

AND

QBE INSURANCE (AUSTRALIA) LIMITED

Defendant

Hearing:	19 June 2024
Appearances:	D A Campbell and N Thompson for the Plaintiffs A S Ross KC and B Sanders for the Defendant
Judgment:	8 July 2024

JUDGMENT OF POWELL J

[Application for adjournment]

This judgment was delivered by me on 8 July 2024 at 3.00 pm.

Pursuant to R 11.5 of the High Court Rules.

…………………..

Registrar/Deputy Registrar

WAKA KOTAHI NEW ZEALAND TRANSPORT AGENCY v THE FLETCHER CONSTRUCTION COMPANY LIMITED [2024] NZHC 1831 [8 July 2024]

[1]    The plaintiffs Waka Kotahi New Zealand Transport Agency, The Fletcher Construction Company Limited, Beca Limited, and Higgins Contractors Limited (“the Alliance”) were responsible for the construction of a section of the State Highway 1 expressway located between MacKays and Peka Peka, to the north of Wellington. The defendant, QBE Insurance (Australia) Limited (“QBE”), underwrote the professional indemnity risk for the project.

[2]    In mid-2017, following damage to sections of the expressway after it opened, the Alliance notified QBE of a potential claim. The claim was ultimately declined by QBE in 2020. The Alliance issued the current proceedings in 2022 and they are currently set down to be heard at a four-week hearing scheduled to commence on 3 March 2025.

[3]    Against this background, QBE has applied for an adjournment of the fixture. The stated reason for the application is prejudice as a result of delays in the discovery process, such that “there is simply no longer sufficient time for all essential steps to be completed before the hearing.”

[4]    On behalf of the Alliance, Mr Campbell has fairly acknowledged that there have been significant delays with discovery for which the Alliance is mostly to blame. The Alliance nonetheless opposed the adjournment application on the basis that there is insufficient material prejudice to warrant an adjournment, such prejudice as may exist was, in part, of QBE’s own making and that overall there is still sufficient time to enable the fixture to proceed on the basis of the timetable proposed by the Alliance.

[5]    The application is made pursuant to r 10.2 of the High Court Rules 2016 which provides:

The court may, before or at the trial, if it is in the interests of justice, postpone or adjourn the trial for any time, to any place, and upon any terms it thinks just.

[6]    The principles informing the application of the discretion in r 10.2 are not in dispute, and have been identified as follows:1

(a)The interests of justice require consideration of not only the interests of the parties before the Court, but also of those awaiting a hearing who will suffer delay to their own cases should an adjournment be granted. This reflects the public interest in the efficient use of court resources.2

(b)As between the parties, the decision to grant or decline an adjournment is essentially a balancing exercise. It involves a consideration of the prejudice that will accrue to the applicant as well as the harm to the respondent if an adjournment is granted or denied.3

(c)A further relevant factor is whether the applicant has acted reasonably and done everything practical to avoid the need for an adjournment.4

(d)The strength of the reasons in support of the application, and the prejudice said to follow from continuing with the trial, is a material factor.5 …

(e)Also relevant is the right of the parties to a fair trial and the need for resolution of the proceedings, including the likely impact of further delay on the quality of the evidence and the difficulties of reorganising witnesses for a later trial date.6

Discussion

[7]    Having considered the material provided by the parties, I accept there may be room to dispute the ultimate responsibility for all of the issues that have arisen with regard to the discovery and the impact that that has on the remaining steps necessary to be taken before trial. However, I agree with Mr Ross on behalf of QBE that there is a genuine possibility, if not probability, of significant prejudice to QBE which cannot be ignored or otherwise addressed by the timetable proposed by the Alliance through to the scheduled trial date and this is determinative in the present case.

1      Poutama Kaitiaki Charitable Trust and Pascoe v Taranaki Regional Council [2022] NZHC 628 at [38]–[39].

2      Cygnet Farms Ltd v ANZ Bank New Zealand Ltd [2016] NZHC 1945 at [8], approving

Commissioner of Inland Revenue v Patel [2013] NZHC 477.

3      O’Malley v Southern Lakes Helicopters Ltd HC Christchurch CP513/89, 4 December 1990 at 1–2.

4      Shanghai Neuhof Trade Co Ltd v Zespri International Ltd [2019] NZHC 3479 at [15]; and see also

Gray v Thom [1997] NZFLR 328.

5      So it has been recognised that the late illness of a party or their witnesses, or counsel, may be a proper ground for an adjournment. See Feasey v Dominion Leasing Corp Ltd [1974] 1 NZLR 593 (SC) at [595]–[596]; and Hamilton v Papakura District Council (1997) 11 PRNZ 43 (HC).

6      Shanghai Neuhof Trade Co Ltd v Zespri International Ltd, above n 4, at [15].

[8]    In particular I cannot ignore the essentially unchallenged evidence of QBE’s engineering expert, Mark Cruden of Meyer Cruden, which is that he will need a further six to nine months to work through the 11 “workpacks” which were not formally discovered until the supplementary discovery in March 2024. This will mean that his report on the scope of the remedial works for which the Alliance sought indemnity — including the cause of the damage, the scope of the repairs and any issues of betterment arising — is unlikely to be issued until January or early February 2025, less than a month before the trial commences. As Mr Ross submitted:

That is not a satisfactory, nor even workable, situation for QBE. If the hearing date is maintained, QBE will only be getting its expert advice on core issues very close to the hearing. There will be no or limited time to obtain legal advice on the impact of that advice on its defence. It will be impossible to comply with the Alliance’s proposed timetable. Briefs of evidence will realistically be provided only weeks before the trial, and expert conferral is unlikely to occur. This will significantly prejudice QBE’s defence. It will also hamper the smooth running of the hearing and the Court’s considerations of the issues.

[9]    I also accept that the wider circumstances detailed by Mr Ross also favour an adjournment:

(a)There is a significant amount in issue - $25 million.

(b)QBE’s application for adjournment has been made promptly. The prospect of adjournment was raised with the Alliance’s solicitors in March 2024, when the scale of supplementary discovery became apparent. The Alliance said in April that it would oppose adjournment. Had the problem been managed then, by agreement, a realistic trial date would have been closer than it will be now.

(c)There ought to be no wasted costs for the Alliance in preparing for the trial. The Court should also be able to reallocate hearing time to other cases which are ready for hearing, enabling the efficient use of Court resources. This will not cause delay to other court users.

(d)Rushing the preparation of expert advice and forgoing expert conferral is not in the interests of justice; is likely to compromise the quality of the evidence before the Court; will reduce the likelihood of settlement; and risks inefficient use of the Court’s time.

(e)The plaintiffs’ claim includes a claim for interest. If the plaintiffs succeed in their claim, this will ameliorate any prejudice to them from the delay in resolution of the claim.

(f)The hearing was not set down by consent. In QBE’s memorandum of 12 December 2022, it objected to a hearing date being set down as inspection was not yet complete and time was required for the parties

to correspond about the issues and for any interlocutory applications to be dealt with. The concerns expressed in that memorandum have eventuated.

(footnotes omitted)

[10]   Conversely, I am unable to see any real prejudice to the Alliance in the event the adjournment is granted. Although, as Mr Campbell submitted, the original dispute has been underway since 2017 the proceedings at issue were only issued in 2022, and it is difficult to see that any delay cannot be appropriately addressed by the award of interest and costs in the event the Alliance is ultimately successful in their claim. Finally, given the nature of both the claim by the Alliance and the defences raised by QBE, it is difficult to see how delay will give rise to any particular issues for the Alliance witnesses, noting that there can be no reason why the Alliance’s witnesses of fact cannot be briefed now, if that briefing has not already occurred.

Decision

[11]   The application for  adjournment  is  granted  and  the  fixture  set  down for 3 March 2025 is vacated.

[12]   Costs on the application are reserved to be determined on conclusion of substantive proceedings.

[13]   At my request following the hearing of the application, the parties prepared a workable timetable so as to identify how much additional time was required to ready the proceedings for hearing and allow the making of realistic timetable orders through to the adjourned trial date. I make timetable orders in accordance with the joint memorandum of counsel dated 21 June 2024, and direct that the proceedings are set down for a 20-day hearing on the first available date after 29 August 2025.

Powell J