Western Park Village Ltd v Baho

[2013] NZHC 1909

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-2727 [2013] NZHC 1909

BETWEEN  WESTERN PARK VILLAGE LIMITED Plaintiff

ANDSINAN ABED BAHO Defendant

DARRYLL LAWRENCE HEAVEN First Counterclaim Defendant

EVELYN HEAVEN
Second Counterclaim Defendant

TRUSTEE MANAGEMENT LTD Third Counterclaim Defendant

Hearing:                   29, 30 and 31 July 2013

Counsel:                  D Chesterman for Plaintiff/Counterclaim Defendants

J E M Lethbridge for Defendant/Counterclaimant

Judgment:                31 July 2013

JUDGMENT OF HEATH J

This judgment was delivered by me on 31 July 2013 at 2.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

WESTERN PARK VILLAGE LIMITED v BAHO [2013] NZHC 1909 [31 July 2013]

Introduction

[1]      Western Park Village Ltd (Western Park) bought a residential unit from Mr Baho in May 2007.  It was situated at 4/30 Augustus Terrace, Parnell and was part of a unit title complex, known as the Augustus Apartments.

[2]      During the course of pre-contractual negotiations, the director of Western Park, Mr Heaven, says that he asked Mr Baho whether “there were any problems or issues with the unit” that he “should know about”.  Mr Heaven alleges that Mr Baho told him that the only problem involved minor leaks on one wall that would be repaired through an insurance payment from his insurer.  Mr Heaven says that Mr Baho omitted to tell him that the Body Corporate of the Augustus Apartments was being sued in nuisance for removal of rock and debris that had fallen from a cliff on the Body Corporate’s grounds.  Mr Heaven complains that Mr Baho should have told him about both the rock fall that had led to the dispute between the two body corporates and the nuisance claim itself.

[3]      On various legal bases, Western Park sues Mr Baho.  It seeks cancellation of the agreement for sale and purchase and consequential orders designed to put the parties back into the position they would have been at the time the agreement was signed.  The consequential orders involve discharging a second mortgage in favour of Mr Baho that was entered into to secure the vendor finance needed to enable Western Park to complete the purchase.  Mr Baho counterclaims to seek repayment of moneys that he contends are owing under the mortgage granted in his favour.

Objection to supplementary evidence in chief

[4]      At  the  commencement  of  the  trial,  Ms  Lethbridge,  for  Mr  Baho,  took objection to the evidence of two expert witnesses whom the Western Park interests intended to call.  Supplementary written statements had been served shortly before the hearing.   The two witnesses are an engineer, Mr Luxford, and a valuer, Mr Cheyne.

[5]      Mr  Chesterman,  for  the  Western  Park  interests,  submits  that  the  two

witnesses  are  required  to  reply  to  a  written  statement  tendered  by  Mr  Baho’s

valuation expert, Mr Taylor.  An engineer needs to give evidence, Mr Chesterman contends,  because  Mr Taylor  has  strayed  into  areas  outside his  expertise  and  a response from a properly qualified expert is required.   Mr Cheyne’s evidence is a response to Mr Taylor’s criticisms of the valuation methodology employed by the Western Park interests’ valuer, Mr Morley.

The timetabling directions

[6]      On 25 September 2012, Associate Judge Doogue, in the knowledge that the trial was to proceed on 29 July 2013, directed that evidence be exchanged in accordance with the default provisions of the High Court Rules.   He reserved the right for the parties to seek a variation to those directions, should they wish to do so.

[7]      In  a  joint  memorandum  dated  30  April  2013,  Mr  Chesterman  and  Ms

Lethbridge stated:

3.        The parties seek the Court’s approval for the following amended

timetable:

(a)       The exchange of the Plaintiff’s statements of evidence for the  Defendants’ claim  and  the  Defendants’ statements  of evidence for the counterclaim to be filed and served by 10

June 2013;

(b)       The Defendants’ statements of evidence for the Plaintiff’s claim and the Plaintiff’s statement of evidence for the counterclaim to be filed and served by 2 July 2013; and

(c)      The Common Bundle to be filed and served by 22 July 2013.

4.This  means  that  all  statements  of  evidence  would  have  been exchanged four weeks from the trial commencement date of 29 July

2013.

On 8 May 2013, Judge Doogue made an order in those terms.

[8]      On  27  June  2013,  a  further  joint  memorandum  was  filed  in  which  an extension of time for the exchange of evidence was sought and later granted:

4....  the  parties  seek  the  Court’s  approval  for  the  timetable  to  be extended to allow for the Defendant’s statement of evidence for the Plaintiff’s claim and the Plaintiffs’ statement in reply to the counterclaim to be filed and served by 5 July 2013.

[9]      Ms  Lethbridge’s  objection  to  acceptance  and  use  of  the  supplementary written statements was raised in writing before the trial began.   On 24 July 2013, Venning J considered that those issues were for the trial Judge.  He said:

[4]      ...

The proposed  supplementary brief(s) are  very late in the piece and would seem to be in breach of r 9.8(1).

The plaintiff has been aware of the fixture for some time.  If, as a consequence of the admission of the brief(s) the fixture had to be vacated, that would be a powerful factor against accepting the briefs.

[10]     Before the exchange of witness statements, Ms Lethbridge inquired (on 22

May 2013) of Mr Chesterman whether the Western Park interests intended to call a civil engineer and/or a quantity surveyor.   On 30 May 2013, Mr Chesterman responded in the negative.  When Mr Chesterman served his written statements, the only expert evidence was from Mr Morley.  When serving his written statements on

11 July 2013, Mr Baho served one from Mr Taylor, also a valuer.

[11]     On 18 July 2013, Mr Chesterman raised an issue about the breadth of Mr Taylor’s evidence and indicated that the Western Park interests were seeking to respond, potentially by calling an additional witness.  On 23 July 2013, at 2.35pm and 3.01pm respectively, the supplementary witness statements of Mr Cheyne and Mr Luxford were served. At 5.00pm Ms Lethbridge objected to their admission.

Analysis

[12]     The  Court  is  given  a  wide  discretion  to  allow  supplementary  written statements to be accepted and used.  The touchstone will be the interests of justice. Rule 9.8 of the High Court Rules provides:

9.8   Supplementary briefs

(1)   A party wishing to offer a supplementary brief must serve it as soon as possible.

(2)   The acceptance and use of the supplementary brief in court will be at the discretion of the trial Judge.

[13]     I have read the evidence of Mr Taylor, Mr Luxford and Mr Cheyne.

[14]     On the valuation issue, Mr Taylor has adopted a different methodology for valuation of the property in issue than has Mr Morley.   Mr Cheyne’s evidence is proffered to support the methodology adopted by the latter.   During her extensive cross-examination of Mr Heaven on the first two days of the trial, Ms Lethbridge plainly  signalled  that  she  intended  to  put  before  the  Court  a  challenge  to  Mr Morley’s impartiality.  In substance, she alleges that some, if not all, of his valuations were deliberately put at inflated values for bank finance purposes.  She asserts that Mr Heaven and Mr Morley colluded in that regard.

[15]     Mr Taylor purports to give evidence of an engineering issue relating to the crumbling of the cliff on which Unit D is situated, and the consequential rock falling that occurred.   He then expresses an opinion on the effect of such matters on the valuation of the property.

[16]     On engineering issues, Mr Taylor has not qualified himself as an expert. Accordingly,  his  opinion  evidence  is  only admissible  on  valuation  issues.[1]      Mr Taylor  does  not  qualify  as  an  expert  engineer  because  he  lacks  “specialised knowledge or skill based on training, study or experience” on the subject.[2]    That being so, Mr Taylor cannot give opinion evidence on matters of engineering.

[1] Evidence Act 2006, s 25.

[2] Ibid, s 4(1), definition of “expert”.

[17]     Mr Taylor is entitled to give valuation evidence about the effect of the “rock falling” issue on the valuation of the subject property.  However, he is not entitled to give evidence of an engineering nature on which to found that opinion.  Rather, any opinion must be expressed based on facts that have been proved by some other admissible evidence.

[18]     Section 25(3) of the Evidence Act 2006 provides:

25  Admissibility of expert opinion evidence

...

(3)     If an opinion by an expert is based on a fact that is outside the general body of knowledge that makes up the expertise of the expert, the opinion may be relied on by the fact-finder only if that fact is or will be proved or judicially noticed in the proceeding.

....

[19]     So far as Mr Taylor’s evidence is concerned, I will let in his written statement on engineering issues, on a provisional basis, subject to any argument later as to which of the engineering facts to which he refers have been proved independently, for the purposes of s 25(4).  The evidence can be used only to indicate the factual foundation for Mr Taylor’s valuation opinion.

[20]     On that approach, there is no need for any reply evidence from Mr Luxford, as there is no admissible expert engineering evidence available from Mr Taylor to which Mr Luxford needs to respond.

[21]     The proposed evidence of Mr Cheyne raises a different issue.  Ordinarily, I would have been loathe to admit Mr Cheyne’s evidence because Mr Morley had already given evidence of methodology.  However, Mr Morley’s evidence has been put in issue, not only on the basis of an incorrect methodology but also on an allegation that he colluded with Mr Heaven and deliberately produced an inflated valuation to suit the Western Park interests.

[22]     In those circumstances, it is fair that Mr Cheyne’s evidence be admitted in order to provide an independent source from which the methodology might be tested. Even if Ms Lethbridge’s submissions about the role of Mr Morley were accepted, the fact that someone is partial does not necessarily mean that a wrong methodology has been used for valuation purposes.  The appropriateness of the valuation methodology can be defended by Mr Cheyne.   I do not regard any of the authorities to which Ms Lethbridge referred me in her written submissions as precluding that approach.

[23]     In the circumstances, I consider that Mr Cheyne’s brief was served as soon as possible.  Exercising my discretion under r 9.8(2), I accept his supplementary brief and allow it to be used for Mr Cheyne to give evidence in chief.

Result

[24]     For those reasons:

(a)       Acceptance and use of the supplementary written statement of Mr

Luxford is refused.

(b)      Acceptance and use of the supplementary written statement of Mr

Cheyne is allowed.

Delivered at 2.00pm on 31 July 2013

Solicitors:

Grove Darlow & Partners, Auckland

Dyer Whitechurch, Auckland
Counsel:

D Chesterman, Auckland

P R Heath J