BODY CORPORATE 417948 AND OTHERS NAMED AT SCHEDULE 1 OF THE NOTICE OF APPEAL v WATTS & HUGHES CONSTRUCTION [2019] NZCA 113

BODY CORPORATE 417948 AND OTHERS NAMED AT SCHEDULE 1 OF THE NOTICE OF APPEAL vWATTS & HUGHES CONSTRUCTION [2019] NZCA 113 [16 April 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA484/2018[2019] NZCA 113BETWEEN BODY CORPORATE 417948 ANDOTHERS NAMED AT SCHEDULE 1 OFTHE NOTICE OF APPEALApplicantAND WATTS & HUGHES CONSTRUCTIONLIMITEDFirst RespondentAND TAURANGA CITY COUNCILSecond RespondentAND AVERY TEAM ARCHITECTS LIMITEDThird RespondentAND MPM PROJECTS (2003) LIMITEDFourth RespondentAND GMR HOLMAC LIMITEDFifth RespondentAND TILE TRENDS LIMITEDSixth RespondentAND ARMSTRONG PLUMBING (BOP)LIMITEDSeventh RespondentAND HOLMES STRUCTURES LIMITED (INLIQUIDATION)Eighth RespondentAND OMAHA INVESTMENTS NO. 1 LIMITEDNinth RespondentAND ROBERT JAMES FOSTERTenth RespondentAND BAY OF PLENTY ASPHALT LIMITEDEleventh RespondentCourt: French and Williams JJCounsel: B M Easton and A K Hough for ApplicantG J Kohler QC for First RespondentA V Davison Second RespondentNo appearance for Third RespondentM S R Lucas for Fourth RespondentV A Whitfield for Fifth RespondentT D Gee for Sixth RespondentN S Elsmore for Seventh RespondentNo appearance for Eighth RespondentD P Turnbull and H K Harkess for Ninth and Tenth RespondentM P Ward-Johnson for Eleventh RespondentJudgment:(On the papers)16 April 2019 at 10.00 amJUDGMENT OF THE COURTA The application for leave to appeal is granted.B The approved question for consideration by this Court is whetherthe requirements of r 7.6 of the High Court Rules 2016 are satisfied on thefacts of this case.C We make no order as to costs.____________________________________________________________________REASONS OF THE COURT(Given by Williams J)[1] The applicants seek leave to appeal pursuant to s 56(5) of the Senior CourtsAct 2016 having been declined such leave in the High Court.11 Body Corporate 417948 v Watts & Hughes Construction Ltd [2018] NZHC 2692.[2] The proceeding involves a substantial apartment complex suffering fromweathertightness issues. At a case management conference Downs J setthe proceeding down for a ten-week trial beginning 13 July 2020. The applicants wereopposed to this course. They argued:The plaintiffs ought to be permitted to complete the repairs and crystallisetheir losses before a trial date is allocated. The orders proposed in [the secondrespondent's] memorandum cut across that prerogative.(Emphasis added.)[3] The applicants proposed that the conference be adjourned for approximately ayear to allow the completion of repairs. The Judge rejected this course in a minutedated 27 July 2018:[4] I am not prepared for the case to "drift" until repairs are complete.The horizon is too open-ended. I acknowledge repairs can cost more than isexpected, but the experts can allow for contingencies.[4] In the applicants' leave application in the High Court the substantive groundupon which leave was sought was that the Judge erred in both fact and law because heallocated a trial date against the wishes of the applicants and the proceeding could notbe readied for trial until the property is repaired so that the actual repair costs andconsequential losses are crystallised.[5] In the application for leave to this Court, the applicants' grounds expanded withspecific reference to r 7.6 of the High Court Rules 2016. The grounds includedthe following:It is seriously arguable that the learned High Court Judge erred in fact and inlaw by fixing a trial before the repairs are finished. Until such time as thatoccurs:(a) There is the need for significant amendments to the pleadings toreflect information gleaned during the repairs, including actualcost/loss data, and potentially new building defects;(b) There is the need for significant refinement of the issues inthe proceeding, namely the nature and extent of the building defects,and actual losses incurred by the Body Corporate; and(c) The Body Corporate is unable to exercise its "obvious choice".[6] The applicants filed five affidavits in support of their application to this Court.The deponents comprised the architect who provided the initial estimated repairtimeline for the project, a director of the Body Corporate secretary with experience inissues related to the repair of leaky buildings elsewhere, a quantity surveyor,the Chairman of the Body Corporate, and the Chairman of a different Body Corporatewho had experience with similar issues. The thrust of their evidence was that complexweathertight building remediation often produces significant new issues andunexpected extra costs once the repair work begins and the true state of the buildingbecomes apparent. Cost assessments, it was said, were sometimes exceeded bysignificant margins as a result. This material was not before the Judge.[7] While the case put by the applicants in the High Court for delaying setting thematter down was unsophisticated to say the least, the question now advanced inthis Court does raise a matter of importance in the context of the timing of fixtures incomplex building remediation cases. In light of the fact that the allocated fixture isstill more than a year away, and that timetabling directions have been made inthe meantime, delay occasioned by hearing the appeal is unlikely to be significant.Finally, we consider the question of the correct application of r 7.6 of the High CourtRules to be arguable.[8] We grant leave to appeal accordingly on the question of whetherthe requirements of r 7.6 of the High Court Rules are satisfied on the facts in this case.[9] Should the respondents who opposed leave wish to file evidence in responseto that of the applicants, they should advise the Court accordingly so that timetablingorders may be made.[10] In light of the way in which the grounds of the application and appeal havedeveloped in this case we are not minded to make a costs order.Result[11] The application for leave to appeal is granted.[12] The approved question for consideration by this Court is whetherthe requirements of r 7.6 of the High Court Rules 2016 are satisfied on the facts ofthis case.[13] We make no order as to costs.Solicitors:Grimshaw & Co, Auckland for ApplicantHornabrook MacDonald Lawyers, Auckland for First, Fourth and Fifth RespondentsRice Speir, Auckland for Second RespondentGibson Sheat, Wellington for Sixth RespondentHollister-Jones Lellman, Tauranga for Seventh RespondentMcElroys, Auckland for Ninth and Tenth RespondentsLyon O'Neale Arnold, Tauranga for Eleventh Respondent