BODY CORPORATE 421364 v WELLINGTON CITY COUNCIL [2019] NZHC 739

BODY CORPORATE 421364 v WELLINGTON CITY COUNCIL [2019] NZHC 739 [8 April 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2018-485-179[2019] NZHC 739BETWEEN BODY CORPORATE 421364 ANDOTHERSFirst to twelfth plaintiffsAND WELLINGTON CITY COUNCIL ANDOTHERSFirst to seventh defendantsHearing: 22 March 2019Appearances: E Dalzell and D Thorne for plaintiffsD Barr and N Taylor for first defendantM Freeman for second defendantNo appearances for third defendantJ Scragg for fourth defendantNo appearances for the fifth, sixth or seventh defendantsJudgment: 8 April 2019JUDGMENT OF ASSOCIATE JUDGE JOHNSTONIntroduction[1] The matter before the Court is an interlocutory application by the firstdefendant (the Wellington City Council) pursuant to pt 5 of the High Court Rules 2016for further and better particulars of the plaintiffs' (Body Corporate 421364 and theowners of the unit titles in the building which the body corporate owns) amendedstatement of claim dated 23 October 2018.[2] At the outset of the hearing I dealt with an unrelated application by thesolicitors acting for the second defendant (Headland Group Ltd) for leave to withdrawas solicitors on the record. I granted Thomas Dewar Sziranyi Letts such leave. Thesecond defendant's address for service is now 11 Rifle Range Road, Ohariu Valley,Wellington 6037. His firm having been granted leave to withdraw, Mr Freeman tookno further part in the application.[3] The first defendant's application is generally supported by the fourthdefendant, but Mr Scragg, counsel for the fourth defendant, did not offer anysubmissions during the course of the hearing.[4] The third, fifth, sixth and seventh defendants took no part in the hearing.[5] Before hearing from Mr Barr for the first defendant and Mr Dalzell for theplaintiff, I indicated that it was not obvious to me that it was necessary to hear fullargument on the application because the practical solution seemed obvious. In anutshell, the plaintiffs do not necessarily resist the first defendant's application forfurther and better particulars. They say they are obtaining additional expert adviceand that when that advice is to hand they will be filing and serving a further amendedstatement of claim that will provide much, if not all, of the information sought. Theyfreely acknowledge that they are not entitled to ask the Court to set the matter downfor trial until that occurs because to do so would be to place the first defendant (andthe other defendants) at a disadvantage. It appeared to me that, whatever the merits ofthe first defendant's application, the sensible approach would be to allow that processto run its course. I adjourned briefly to allow counsel to discuss this. They did so.However, when the Court resumed, Mr Barr indicated to me that the first defendantproposed to pursue its application, as of course it was entitled to do.[6] At the conclusion of the hearing, my view about the proper outcome of thisapplication had not changed.Principles governing the particularisation of claims[7] Part 5 of the High Court Rules 2016 sets out the requirements for pleadingsgenerally.[8] The guiding principle as it applies to statements of claim is abundantly clear.A claimant must articulate his, her or its claim with sufficient particularity to ensurethat the parties against whom the claim is made are fairly informed as to the case thathas to be met.1 It is as simple as that. However, the courts have always recognisedthat it may not be possible for a claimant to articulate the case to the extent requiredon the commencement of proceedings, and that claims expand, contract and alter intheir complexion as interlocutory stages proceed. Equally, a claimant's case maychange depending on forensic investigation or the briefing of witnesses of fact orexperts. So, it is fair to say that the particularisation of the case is often an iterativeprocess. That is especially so in certain categories of case, and I would venture tosuggest that weathertight building litigation is an obvious example of such a categoryof case. There is ample recognition of all this in the authorities.[9] The essential protection for a defendant is the close of pleadings date. Theclose of pleadings date rules a line. Once it has passed no party may amend itspleadings without the Court's leave. And of course, no party may lead evidence attrial that goes materially beyond its pleaded case without leave. Generally, leave willnot be granted if this would give rise to unfairness.[10] So, an important aspect of the management of litigation involves the setting ofthe close of pleadings date. As a rule, at a final case management conference, onceboth parties have indicated that they have fully and finally articulated their cases intheir pleadings, and do not anticipate any, or any further, amendment, the Court willfix the close of pleadings date. Until that happens, a party is not at risk of beingsurprised. In this case, we are far from that stage.The factual background[11] It is unnecessary for the purposes of this interlocutory judgment to describe thefactual background in great detail.[12] The first-named plaintiff is the Body Corporate, which is the registered ownerof a unit title complex in Wellington. The second to twelfth-named plaintiffs are theowners of the unit titles in the complex. They say that the complex is not weathertight.They say that they have claims against the first to seventh defendants, all of whom1 High Court Rules 2016, r 5.26(a) and (b).they accuse of negligence in relation to the construction of the property, which theysay caused the alleged weathertightness problems and their losses. Their primaryclaim is for the cost of rectification. At this stage, quantum is necessarily speculativebecause the plaintiffs have not carried out the remedial work. All in all, it is a verycommon scenario.The plaintiffs' claim[13] In their amended statement of claim, the plaintiffs make some key accusationsas to the alleged negligence of each of the seven defendants, and then say that as aresult of that negligence the building suffers from certain defects. Those defects aresaid to relate to:(a) the roof;(b) the cladding;(c) the decking;(d) junctions between cladding and joinery;(e) the block walls;(f) inadequate protection at the transition points between exterior blockwalls and internal environments;(g) the flashings; and(h) the insulation.[14] They plead that those defects have resulted in various types of damage, allbroadly related to moisture ingress.[15] Then their pleading turns to the necessary remedial work and in paragraph 24of the amended statement of claim this is described in general terms. For example, itis said that the replacement of some roof flashings and the removal and relaying ofsome areas of the roof cladding will be necessary.[16] As to the cost of remedial work, this is estimated to be $1,350,000 plus GST.During the course of the hearing Mr Dalzell told the Court that, since this amendedstatement of claim was filed and served, further investigations indicate that the figurewill be more than double that.[17] Appended to the plaintiffs' amended statement of claim is a schedule referredto as a 'Defects Chart'. This extends to some 24 pages. It is an attempt to providedetail in relation to each of the defects.[18] In the Defects Chart, the first column seeks to break down the alleged defectsreferred to in paragraph 21 of the statement of claim. So, for example, the defectsconnected with roofing are broken down into the inappropriate positioning of thedownpipes, poor detailing of the flashings, the incompatibility of certain materials thatare in contact with each other, poor detailing of the roof cladding itself and theinadequacy of the roofing underlay. The second column contains examples of thelocations where these defects have been identified. The third column containsallegations as to the consequential damage and future likely damage. The fourthcolumn seeks to attribute these defects to either design or construction issues. Thefinal column identifies the building standards, trade practices or manufacturers'instructions that are said to have been breached.[19] It is fair to say, as the first defendant says, that the pleading is replete withqualifications. The Defects Chart notes, in relation to each category of defect, thatthere may be additional defects not listed because not every elevation of every unithas been tested. The phrase "including but not limited to" is used on several occasionsthroughout the statement of claim. Furthermore, as already mentioned, the listedlocations in the Defects Chart are said to be examples and not an exhaustive list.[20] As I understand it, there are three key respects in which the first defendant saysthe plaintiffs' pleading are inadequate.[21] First, it is said that the plaintiffs' have not provided adequate particulars of thedefects they say the property suffers from. The argument is not so much that theplaintiffs have not identified the alleged defects — they have. It is more a matter ofthe form of the pleading.[22] So, at the conclusion of paragraph 21 of the statement of claim, in which theplaintiffs identify the categories of defects from which they allege the building suffers,there is this:The defects set out above and further particularised in schedule 2 to thisstatement of claim are collectively referred to as the defects. The defects arebased on investigations of the townhouse units undertaken to date and are notexhaustive. Other defects and damage may become apparent as a result of theplaintiffs undertaking additional investigations.[23] This is a clear message that the plaintiffs' claim may not be fully particularisedand that there may be more to come. Likewise, there are the further such indicationsin the schedule that I have referred to at [18].[24] Finally, the pleading is criticised because the cost of remediation is an estimateonly.The first defendant's argument[25] The first defendant says this is not good enough. It says the plaintiffs must nailtheir colours to the mast. They must say whether the defects identified, and theexamples given, are exhaustive or not. At very least, they must say whether they areasserting that the problem is a systemic one requiring the complete replacement of theallegedly defective aspect of the building (the roof for example) or whether targetedrepairs will be good enough. And, of course, they say that the plaintiffs must givethem a final claim figure (as opposed to a mere estimate).[26] The first defendant's expert, Ms Dianne Johnson, who is a well-respectedsurveyor who has given evidence in a number of weathertightness cases, says that, asmatters stand, she is unable to identify whether the plaintiffs are alleging that theexamples given of defects illustrate a systemic problem or not. The plaintiffs' expert,Mr Thomas Wutzler, who is equally well respected in the area, disagrees.[27] In my view, this difference between the experts is not something that the Courtneeds to resolve.[28] Were it necessary to do so, I would be inclined to prefer Ms Johnson'sevidence, but only because the plaintiffs do not maintain that their case is yet fullyparticularised.The plaintiffs' response[29] Mr Dalzell advanced two principal responses to the first defendant's criticismsof the amended statement of claim.[30] First, he submitted that a plaintiff in a case such as this is entitled to plead theexistence of a defect and then provide examples of this as illustrations of the way inwhich the defect has manifested itself. That, in my view, is correct and, broadlyspeaking, consistent with Kós J's observations in Platt v Porirua City Council.2 Butwhat it does not respond to is the first defendant's contention that the plaintiffs shouldclearly allege the defects are systemic in nature, such that full replacement isnecessary, if that is in fact their case.[31] Accordingly, if that is as far as the argument went, I would be inclined to orderthat the plaintiffs state with specificity the remedy that they seek.[32] However, Mr Dalzell's second point which, in my view, is the practical answerto this application, is that as matters stand the plaintiffs themselves are not in a positiondefinitively to say whether the alleged defects are of a systemic nature (or, obviously,put a final figure on the costs of remedial work). The plaintiffs are still gatheringinformation and seeking advice from their expert advisers. When that exercise iscomplete, they propose to file a further amended statement of claim in which they will:(a) further particularise the defects and provide any additional examplesthat become apparent;2 Platt v Porirua City Council [2012] NZHC 2445.(b) be in a position to say whether they are seeking, for example, acomplete re-roofing or targeted repairs; and(c) put a final cost on the work they allege is required.[33] As he submits, it is hard to see what point there would be in making an orderrequiring the plaintiffs to file a further amended statement of claim at this stage,providing what further information they currently have to hand, when all concernedknow that the investigations are not complete and that a further pleading will need tobe filed.[34] In the course of argument, Mr Barr emphasised the evidence offered by thefirst defendant that its motivation in seeking clarity on the pleadings as early aspossible was its policy to seek to resolve litigation such as this at the earliest possiblestage and that it is unable to initiate settlement negotiations until such time as the claimis adequately pleaded. That approach is to be encouraged. However, as Mr Dalzellsubmitted, it cannot detract from a plaintiff's entitlement to carry out all necessaryinvestigations before committing itself to a final pleading.[35] The corollary of this is of course that the plaintiffs must accept that they arenot entitled to ask the Court to set the matter down for trial until such time as theirclaim is finalised.[36] Once that occurs, the first defendant — and indeed the other defendants — willthen be able to re-evaluate the precision of the plaintiffs' pleading and make ajudgement as to whether they wish to obtain any further particulars (or take any otherstep such as administering interrogatories).Conclusion[37] In my judgement, that is the sensible course here, and I decline to make anyorder at this stage.[38] A matter that received some attention during the course of the hearing was theefficacy or otherwise of the what I will describe as the inclusive components of theplaintiffs' current pleading — that is to say, those components that identify defects asincluding but not limited to and the locations of the damage being examples only.[39] The first defendant expressed concern that if such pleadings remained extantwhen the matter went to trial, it would entitle the plaintiff to call evidence beyond thescope of the pleading — for example, evidence of unspecified defects or damage.[40] In my judgement, that is not the case. If, for example, this case were to go totrial on the basis of the plaintiffs' current pleading, then the plaintiffs would, in myview, be limited to calling evidence of the defects expressly identified and theexamples referred to, unless and until they sought and obtained leave to call evidencegoing beyond that pleading in the usual way. It simply cannot be the case that theinclusion of such formulae in pleadings obviates the requirement to alert the defendantto the case that he, she or it needs to meet.[41] In the circumstances of this case those observations are obviously gratuitousas the plaintiff has clearly signalled its intention further to amend its pleadings.However, in the event of the further amended pleading continuing to include suchlanguage, my view is that it will not have the effect that the first defendant fears.[42] I reserve costs. Counsel may file memoranda if they are unable to agree, as Iwould expect them to be able to do.Associate Judge JohnstonSolicitors:Parker & Associates, Wellington for plaintiffsSimpson Grierson, Wellington for first defendantThomas Dewar Sziranyi Letts, Lower Hutt for second defendantDuncan Cotterill, Wellington for fourth defendant