The Minister of Education v James Hardie New Zealand [2020] NZHC 47

The Minister of Education v James Hardie New Zealand [2020] NZHC 47 [31 January 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2013-404-1899[2020] NZHC 47UNDER Consumers Guarantees Act 1993, the FairTrading Act 1986, the Building Act 2004BETWEEN THE MINISTER OF EDUCATION ANDOTHERSFirst to Fourth PlaintiffsAND JAMES HARDIE NEW ZEALANDFirst DefendantSTUDORP LIMITEDSecond DefendantCARTER HOLT HARVEY LIMITEDThird DefendantCSR BUILDING PRODUCTS (NZ)LIMITEDFourth DefendantHearing: 24 January 2020Counsel: NF Flanagan and J Carlyon for plaintiffsDM Salmon, M Heard and H Bush for third defendantJudgment: 31 January 2020JUDGMENT (No. 6) OF FITZGERALD J[Ministry's application for leave to amend pleadings]This judgment was delivered by me on 31 January 2020 at 3:30pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Meredith Connell, AucklandLeeSalmonLong, AucklandAND AUCKLAND COUNCIL AND OTHERTERRITORIAL AUTHORITIES LISTEDIN SCHEDULE 1 TO THE FIRSTAMENDED STATEMENT OF CLAIM BYTHIRD DEFENDANT AGAINST FIRSTTO FIFTIETH THIRD PARTIESFirst to Fiftieth Third PartiesIntroduction[1] The background to this litigation is set out in previous judgments and will notbe repeated here.1[2] The Stage 1 trial in this matter is due to commence in approximately threemonths' time. On any view, it will be a significant hearing. It is scheduled to run forapproximately six months. A key issue for determination is the Ministry's allegationthat Carter Holt's Shadowclad product, when used to clad school buildings without acavity, is inherently defective; or in other words, not fit for purpose.[3] The Ministry applies for leave to amend the sixth amended statement of claim,to include an allegation that, at various points in time, Carter Holt knew thatShadowclad was defective.2 Carter Holt opposes a number of the proposedamendments (though not all of them), on the basis they introduce new alleged defectsinto the claim. Given a key aspect of the evidence on whether Shadowclad is defectivewill be extensive testing and similar experiments, Carter Holt says it is too late for theMinistry to introduce new alleged defects into its claim, given Carter Holt will nothave sufficient time to carry out testing to rebut the new allegations.The proposed amendments – further detail and the parties' positionsThe proposed amendments[4] Key issues at the Stage 1 hearing will be whether Carter Holt, as a productmanufacturer, owed the Ministry a tortious duty of care; and if so, whether Carter Holtbreached that duty. Key to the Ministry's claim on breach is the way in which it saysShadowclad is inherently defective. The Ministry pleads a range of alleged defects inSchedule 2 to its sixth amended statement of claim. That schedule of defects has beencentral to the Ministry's case from the outset.[5] Carter Holt denies its product is defective in the manner alleged by theMinistry. Carter Holt also says that it cannot have been negligent in manufacturing1 See for example, The Minister of Education v James Hardie Ltd [2018] NZHC 1481 at [1]–[21].2 Leave is required given the proposed amendments are being made after the close of pleadingsdate.and supplying Shadowclad in any event, given Shadowclad complied with AcceptableStandard E2/AS1 (the Standard), being a means of demonstrating compliance with theNew Zealand Building Code (and in particular, cl E2: external moisture).[6] The Ministry says the existence of the Standard does not mean Carter Holt didnot breach its duty of care because, inter alia:3In the event that Shadowclad complied with the Standard, that is merely onefactor to be considered in determining whether Carter Holt Harvey breachedits duty of care and is outweighed by those factors particularised at paragraphs[38] to [48] above [being, in broad terms a range of defects and how they aresaid to lead to weathertightness failures].[7] The Ministry now wants to add the following text to the end of the aboveparagraph:, and the fact that Carter Holt Harvey knew that Shadowclad was defective.Particulars of knowledge(a) Carter Holt Harvey knew that batches of Shadowclad wereinsufficiently treated in:(i) March 2002;(ii) December 2009;(iii) April 2010;(iv) September 2010;(v) March 2011;(vi) May 2011;(vii) June 2013.(b) Carter Holt Harvey knew in April 2005 that preservative leachedfrom Shadowclad in use.(c) Carter Holt Harvey knew in August 2012 that galvanised nailswere incompatible with Shadowclad, despite their beingrecommended for use with it;(d) Carter Holt Harvey knew in August 2010 that its installationmaterials was [sic] inadequate.3 Sixth amended statement of claim, at [60](f).Carter Holt's position[8] Carter Holt does not oppose the new pleading of knowledge per se, or theproposed allegations at (a)(i), (b) and (d) above. But it says the proposed amendmentsconcern Carter Holt's knowledge that Shadowclad was "defective", which in thecontext of the Ministry's claim, can only be by reference to the list of alleged defectsin Schedule 2. Carter Holt says the pleaded knowledge on the dates set out at (a)(ii)to (vii) above is based on documents which the Ministry says will show Carter Holtknew some batches of Shadowclad had insufficient levels of azoles preservative.[9] In this context, Carter Holt says that the Ministry's allegations concerningpreservative treatment of Shadowclad, and its particularisation of those allegations,have always concerned tin-related treatments. There have been no alleged defectsconcerning azole-related treatments. It says it is too late to include an alleged defectconcerning insufficient levels or performance of azole-related treatments, particularlygiven that will only be a "defect" if it caused Shadowclad to be unfit for purpose(namely being prone to fungal rots). Carter Holt says that if issues with azoletreatments had been pleaded from the outset (or at least at an earlier point in time), itwould have conducted detailed testing of Shadowclad treated with azole-relatedtreatments, to rebut any suggestion that insufficient levels of that treatment mean theproduct is defective. Carter Holt points to the fact that in defence to the allegationsconcerning tin based preservatives, its evidence (served a little over a month ago)includes the results of a 36-month weathering trial of tin treated Shadowclad samples.It says it is simply too late to replicate such evidence with samples treated with azoles.[10] Carter Holt also queries the merits of any claims concerning azole treatments,stating that four of the six documents relied on by the Ministry are not even relevantto Shadowclad, or Shadowclad treated with azoles. And in relation to the remainingtwo documents, Carter Holt says they simply show that on two occasions, it was awarethat batches of Shadowclad had taken up insufficient levels of azole-basedpreservative. It says this shows only that its quality control process was working, andit cannot be translated into knowledge of an inherent and systemic defect inShadowclad.[11] On the allegation concerning incompatibility with galvanised nails, Carter Holtsays this similarly features nowhere in the pleaded Schedule 2 defects. Again, in thecontext of a hearing which will focus to a large degree on testing and testing results ofShadowclad, Carter Holt says it would have wanted to carry out experiments onShadowclad's use with galvanised nails, to rebut any suggestion that use ofShadowclad with such nails leads to it being unfit for purpose. Carter Holt says thatin reliance on the pleaded alleged defects, it has not carried out any such experimentsor addressed them in its evidence to date.[12] Finally, Carter Holt notes that the Ministry has also not advanced any evidenceof testing related to azole-based treatments or Shadowclad's use with galvanised nails.It says this further highlights that neither party understood Schedule 2 to includealleged defects concerning those matters.[13] The Ministry denies there is anything new in its pleadings – other than ofcourse the allegation that Carter Holt's knowledge at the various dates listed is anotherfactor negating the effect of any compliance with the Standard. It says concernsregarding preservative treatments have always been a feature of Schedule 2, and thepleaded defects concerning preservative treatments have never been limited to tin-related treatments. Further, the Ministry notes that Shadowclad's incompatibility withgalvanised nails is already referenced in the claim, namely the reference in Schedule3 ("Misleading Descriptions") to Carter Holt's statement, said to be misleading, that:15 Years Durability: As cladding will be obtained from painted, "stained" orunpainted Shadowclad fixed with galvanised flat head nails.[14] This statement is said to be misleading by reference to, inter alia, theSchedule 2 defects.[15] The Ministry says that even on the basis the underlying alleged defects are"new" (as Mr Flanagan, counsel for the Ministry, invited the Court to assume for thepurposes of the application), there is no real or significant prejudice to Carter Holt andthe interests of justice mean the amendments should be allowed. It notes the proposedamendments were flagged only a matter of days after the close of pleadings date, andtherefore very soon after the Ministry could have amended as of right in any event.Further, it says significant delays in Carter Holt's discovery meant it was onlyreviewing the relevant documents (and a large number of other documents discoveredby Carter Holt) at a very late stage. The focus on that exercise meant there was not thecapacity to consider the potential impact on the pleadings at that time. The Ministryfurther notes that no significant prejudice has been shown if leave to amend is granted;if the Court is of the view that Carter Holt ought to be permitted to serve furtherevidence, the Ministry will take a reasonable and responsible approach to that. TheMinistry says there is no credible basis to suggest the Stage 1 trial date would be placedin jeopardy if leave were granted.[16] The Ministry accepts that its own evidence does not address testing ofShadowclad treated with azoles, or its compatibility with galvanised nails. But it saysthat does not reflect its own reading of the pleadings, but rather that it is content torely on Carter Holt's own documents to prove its case on these particular defects.Finally, it says nothing significant can be taken from Carter Holt's evidence as towhether the documents relied on by the Ministry are relevant to or support the allegeddefects, given such matters are properly for trial.Application for leave to amend – approach[17] In Elders Pastoral Ltd v Marr, the Court of Appeal stated that a party applyingfor leave to amend their pleadings after the close of pleadings date will need to"surmount the three formidable hurdles" of showing that doing so:4(a) would be in the interests of justice;(b) will not significantly prejudice other parties; or(c) cause significant delay.[18] More recently, this Court has identified the following matters as relevant in anapplication to amend:54 Elders Pastoral Ltd v Marr (1987) 2 PRNZ 383 at 385.5 Monster Energy Company Ltd v Ox Group Global Pty Ltd [2016] NZHC 2124 at [28].(a) the merits of the proposed pleading;(b) whether irreparable damage would be suffered by the applicant;(c) the timing of the application and magnitude of, and reasons for, thedelay;(d) the risk of significant prejudice to other parties;(e) the effect on public resources reflected in the impact on casemanagement and the timetable to trial;(f) the importance of the principle that the parties should have everyopportunity to ensure that the real controversy goes to trial so as tosecure the just determination of the proceedings; and(g) the interests of justice, an overarching consideration.Discussion[19] As a preliminary point, the proposed pleading concerns knowledge. But thatrelates to Carter Holt's alleged knowledge that Shadowclad was "defective" in certainways at certain points in time. I agree with Carter Holt that the reference toShadowclad being "defective" must be read as being by reference to the allegeddefects set out in Schedule 2 to the sixth amended statement of claim.Azole based treatments[20] The alleged defects concerning levels or efficacy of preservative treatments areset out in paragraph 4 of Schedule 2 as follows:Shadowclad is not adequately durable:(a) The light organic solvent preservative levels in Shadowclad were toolow and ineffective to prevent fungal rots:i. at all relevant times, exterior timber cladding wasrequired to be treated to H3.1 or H3.2 standard forpreservative treatment (and Carter Holt Harveyrepresented that Shadowclad was treated to H3.1 or H3.2requirements); andii. where the Cladding Sheets were treated to H3.1, thestandard required a 0.08 percentage by mass retentionlevel for tin related treatments to not less than 90% ofsamples tested. The treatment level of Shadowclad sheetsis consistently substantially below 0.08.(b) Shadowclad is prone to fungal rots, which destroy the integrity of thecladding.Particularsi. The preservative treatment levels are insufficient toinhibit fungal rot, making the sheets prone to fungal rot.ii. At all material times, the treatment of Shadowclad tohazard class H3.1 using the LOSP treatment method, withtributyltin as the active ingredient, provided inadequateprotection for New Zealand weather conditions, due to:A. its poor performance in situations where Shadowcladis consistently wet for prolonged periods; andB. the known tendency of tributyltin to rapidly deplete.[21] Paragraph 4(a) alleges that the treatment level of Shadowclad with "tin relatedtreatments" was consistently below that required by the relevant standard, H3.1. Onits face, this alleged defect does not relate to azole-related treatments.[22] When read in the context of paragraph 4(a), paragraph 4(b) is directed atpreservative treatments levels being consistent with the Standard, but even so,providing inadequate protection for New Zealand weather conditions (given thosematters pleaded at sub-paragraphs A and B). Mr Flanagan is right to say that paragraph4(b)(i), at least on its face, is not limited to any particular type of treatment, orexpressed to be a more general statement of which paragraph 4(b)(ii) is merely furtherdetail. He also confirmed that the Ministry does not allege that treatment with azole-related treatments to the requisite level will still be insufficient.[23] But despite this, I consider a fair and proper reading of pleaded defect 4 as awhole does not suggest that azole-related treatments are in issue (in either of the waysalleged in relation to tin):(a) Paragraph 4(a) concerns defects arising when Shadowclad does notmeet the level of preservative required by H3.1 (or 3.2). And thatallegation is plainly limited to tin-related treatments. Sub-paragraphs(i) and (ii) are clearly intended to give further detail to the generalisedallegation in the opening lines of paragraph (a).(b) While paragraph 4(a) is directed to issues said to flow from treatmentlevels being below that required by standard H3.1 (or H3.2), a fairreading of paragraph 4(b) as a whole is that it is directed to issues saidto flow even if Shadowclad is treated with tin-related treatments to therequired level. Were it not, then sub-paragraph (i) would be a repeat ofthe allegation in paragraph 4(a) in relation to tin-related treatments, butalso a free-standing such allegation in relation to "below the requiredlevel" of all other (unnamed) treatments, such as azoles. This would bea curious approach to the pleading.(c) In addition, having referred expressly to tin-related treatments in thecontext of the alleged effect of treatments below the required level (inparagraph 4(a)), it was not unreasonable for Carter Holt to proceed onthe basis that this particular allegation did not extend to other, non-tinrelated treatments.(d) Further, that paragraph 4(b) as a whole is directed to issues said to floweven if Shadowclad is treated to the requisite levels is reinforced by howparagraph 4 of Schedule 2 was developed. As originally filed, (then)paragraph (iv) of Schedule two was directed to (a) the light organicsolvent preservative (LOSP) levels in Shadowclad being too low andineffective to prevent fungal rots, and (b), Shadowclad being prone tofungal rots. The former was directed at inadequate levels of LOSPlevels, the latter an inherent characteristic of Shadowclad.6(e) Following an application by Carter Holt for further particulars of howthe treatment of Shadowclad failed to comply with the Building Code6 Counsel for Carter Holt has confirmed that azoles are an LSOP treatment.and how LSOP levels compared to the Code requirements (directed at(iv)(a)) and of the allegation that Shadowclad is prone to fungal rot(directed at (iv(b)), the Ministry filed its third amended statement ofclaim. This introduced paragraphs 4(a)(i)and (ii) in their current form(i.e. limited to tin), as well as 4(b)(i). In this context, it was reasonableto understand the pleading differentiated between alleged "below therequired level" of LSOP (and that allegation being limited to tin), andthe treatment simply being insufficient to inhibit fungal rot. In otherwords, it is not a natural reading of alleged defect 4 as a whole that anallegation of "below the required level" of treatment in relation to allother treatment types (including azoles) is captured by 4(b)(i), with tin(expressly) captured at 4(a).(f) This understanding would have been further reinforced by theintroduction of 4(b)(ii) in the fifth amended statement of claim. Whilenot expressly stated to be further detail of 4(b)(i), it would not havebeen unreasonable to understand it in this way, particularly given theoriginal distinction between alleged inadequate preservative levels andan inherent characteristic of Shadowclad. In other words, the allegationthat even with the required level of tin, Shadowclad is still prone tofungal rot suggests an inherent defect in Shadowclad itself, rather thananything to do with insufficient treatment.[24] For completeness, in its written submissions, the Ministry said the allegationrelating to under-treatment with azole-based preservatives is also already captured bydefect 1 in Schedule 2 (though the focus of argument at the hearing was on defect 4,as discussed above). But as Carter Holt notes, the focus of defect 1 is that irrespectiveof preservative treatments, Shadowclad is said to be "inherently prone to absorbingsignificant amounts of moisture" by, for example, capillary action through end graintimbers at all edges. This defect does not relate to alleged "below the required level"of preservative treatments, and what the effect of such under-treatment is said to be.[25] I have previously noted that in a case of this nature, and where the Ministryhas particularised (in Schedule 2) the alleged "headline" defects and how those defectsare said to come about, Carter Holt is entitled to rely on Schedule 2 when assessingthe case it has to meet, and ought not to have to "guess" in that regard.7 On its face,and when alleging defects arising from alleged under-treatment with preservatives,Schedule 2 does not refer to azole-based treatments, but expressly refers (twice) to tin-based treatments.[26] On this basis, Carter Holt's evidence in response to the claims made against itis limited (in the context of allegations concerning preservative treatments) to tin-related treatments. Similarly, the Ministry does not advance any evidence of testingof azole-related treatments. This reinforces that "below the required level" of azole-related treatments was not the original focus of the pleadings.[27] If insufficient levels of azole-related treatments was always intended to form apart of Schedule 2, there is no apparent reason why this could not have been squarelypleaded at an earlier date, so that Carter Holt was properly on notice of the allegationand thus what testing evidence it might want to adduce in response. Ultimately,insufficient levels of azole-based treatments appears to be somewhat of an "afterthought," arising from the Ministry's review of some of Carter Holt discovereddocuments, rather than a central allegation of the Ministry's own case. The Ministryconfirmed in February 2018 that it had prepared "a battery" of evidence concerningShadowclad's alleged inherent defects. As noted, none of the evidence it has servedto date includes testing of non-tin related treatments.[28] On the basis the allegation is new, therefore, is there significant prejudice toCarter Holt in permitting it to now be made? I am satisfied there is a real risk of suchprejudice. There is no doubt the evidence at the Stage 1 trial will focus heavily onexpert testing of Shadowclad. It is therefore not unreasonable for Carter Holt to saythat had it known that part of the Ministry's case was that insufficient levels of azole-related treatments meant Shadowclad was not fit for purpose, it would have carriedout testing to rebut such an allegation (as it has done with its 36-month trial of tin-related treatments). Further, I agree with counsel for Carter Holt when he says thetesting would have needed to assess whether "below the required level" azole7 See, for example, my observations in The Minister of Education v James Hardie Ltd (No. 4) [2019]NZHC 1760 at [34].treatment had any effect on Shadowclad's performance; in other words, even if somebatches of Shadowclad retained less than the specified level of azole treatment, what,if any, effect did that have on Shadowclad's ability to inhibit fungal rot? And thattesting would no doubt have needed to assess the consequences of a range of differentlevels of azole-related treatments, how that compared to the levels revealed in thedocuments on which the Ministry relies, and whether it evidences a systemic andinherent flaw in Shadowclad. It would not be appropriate in my view, for a case tobe advanced against Carter Holt that insufficient levels of azole-related treatments leadto Shadowclad being prone to fungal rot, in circumstances where Carter Holt has nothad a proper opportunity to prepare evidence in response.[29] I note the Ministry's position that if the Court is satisfied Carter Holt shouldbe permitted to put on further evidence, the Ministry will take a reasonable andresponsible approach to that. But this somewhat misses the point. Preparing expertevidence on wholly new topics at this juncture, only a few months out from the startof an extremely lengthy and complex trial, is prejudicial in and of itself, putting asidethat it seems there is simply insufficient time in any event (given the time period overwhich Carter Holt has prepared its tin-related treatment evidence). There would alsothen need to be time for the Ministry to put on evidence in reply. The parties and theirexperts should not be distracted by such tasks when they will no doubt be focused onmatters such as completing the Ministry's existing reply evidence; completing thevarious discovery tasks; preparing for trial, and the experts considering each other'sevidence and preparing for and engaging in expert caucusing. And I am not persuadedthe position is any different if one "measures" the timeframe from when Carter Holtwas first put on notice of the proposed amendments (in early November 2019), which,given the intervening holiday period, does not add any significant time into theanalysis.[30] In relation to those factors relevant to whether leave ought to be granted:8(a) At least on the face of the materials advanced by Carter Holt on thepresent application, the documents the Ministry proposes to rely on do8 See [18] above.not appear to provide a very strong platform for suggesting systemicunder-treatment of Shadowclad with azole-related treatments,9 norwhat the effects that might be in any event. But I am conscious thatissues like this cannot realistically be assessed on an interlocutoryapplication. I accordingly view this factor as neutral.(b) I do not consider irreparable damage would be suffered by the Ministryif leave is not granted. As noted, issues concerning azole-relatedtreatments has never been a focus of the Ministry's pleaded case. Noris it a feature of the expert testing evidence the Ministry intends toadduce at trial. That evidence is no doubt directed to what the Ministryconsiders to be the key elements of its case. This factor weighs againstleave being granted.(c) I accept that notice of the proposed amendments was given only a fewdays after the close of pleadings date, and that the amendments arisefrom review of Carter Holt's discovered documents, and that in turn,there have been delays in Carter Holt completing its discovery. Thatsaid, however, the Ministry has clearly been testing Shadowclad in avariety of ways over the last several years. Insufficient levels of azole-related treatments has never featured, expressly at least, as part of itscase. For these reasons, and as noted earlier, there is no apparent reasonwhy alleged issues arising from insufficient azole-related treatmentscould not have been squarely pleaded earlier. This factor is thereforeneutral.(d) I have addressed above the real risk of significant prejudice to CarterHolt. This weighs (heavily) against leave being granted.(e) Granting leave, and the consequent need to prepare further expertevidence on new topics now, could well have an adverse impact on casemanagement, by unnecessarily distracting the parties, and their experts,9 That is, rather than some batches identified at particular points in time which did not have therequisite level of preservative.from the ranges of tasks to be attended to in the lead up to (a verysignificant) trial. It is not possible to assess whether granting leavewould cause an adjournment of the Stage 1 trial in May. But I considerit reasonably unlikely. Overall, however, this factor weighs (slightly)in favour of declining leave.(f) Plainly the Ministry ought to have every opportunity to bring the "realcontroversy" to trial. But I am satisfied it will have that opportunity,even if leave is not granted. The core of its case (in terms of the allegedinherent defects in Shadowclad) are those pleaded in Schedule 2.Azole-related treatments do not feature, expressly at least, in thatSchedule. And it can be expected that the Ministry has directed itsevidence to what it considers to be the "real controversy" between theparties.[31] For these reasons, I consider the overall interests of justice mean that leaveought not to be granted to those amendments at paragraphs 54 (f)(a)(ii) to (vii) and60(f)(a)(ii) to (vii) of the proposed seventh amended statement of claim.Galvanised nails[32] Many of the above observations apply equally to the proposed amendmentconcerning Shadowclad's alleged incompatibility with galvanised nails.[33] Mr Flanagan again invited me to proceed on the basis the allegation is new(despite the Ministry's written submissions suggesting that Shadowclad's allegedincompatibility with galvanised nails having been put in issue via Schedules 3 and 7of the sixth amendment statement of claim). Mr Flanagan was right to approach theissue in this way. Somewhat indirect and opaque references to galvanised nails inSchedules 3 and 7 of the sixth amended statement of claim are not sufficient to putCarter Holt on notice that part of the Ministry's case as to why Shadowclad isinherently defective is because it is incompatible with galvanised nails. Thatallegation, or indeed anything to do with using Shadowclad with galvanised nails, doesnot feature in the Schedule 2 list of alleged defects. Again, if this is one way in whichShadowclad is said to be inherently defective, there is no apparent reason why thiscould not have been squarely put in issue earlier; particularly given the period overwhich the Ministry has been testing and examining the product.[34] Nor does the Ministry's evidence comment on or contain testing or similarevidence of Shadowclad's alleged incompatibility with galvanised nails. Like theabsence of testing of non-tin related treatments, this reinforces that this alleged defecthas never been central to the Ministry's case. If leave is declined, there is no doubtthe "real controversy" will still go to trial.[35] Further, if the allegation is to be made, Carter Holt ought to have a properopportunity to put on whatever expert evidence it considers necessary to rebut it.Carter Holt confirms that, based on the pleadings to date, it has not carried out anyexperiments or testing of Shadowclad's use with galvanised nails. While it has notsaid how long or extensive any such testing would be, I consider there to be significantprejudice, at least in a case such as this, for new alleged defects to be introduced intothe claim, requiring new testing and experiments, only a few months prior to trial. Andeven if there were sufficient time for Carter Holt to carry out such testing, it would bea not insignificant distraction from what will no doubt be a fairly intense lead up tothe Stage 1 trial.[36] It is not possible to assess the merits of the proposed allegation. But given theallegation is new, and taking into account those matters discussed at [34] and [35]above, the factors relevant to an application for leave to amend weigh clearly againstleave being granted in relation to this proposed amendment also.Result and costs[37] By consent, the Ministry's application for leave to amend the sixth amendedstatement of claim is granted in respect of the amendments proposed at paragraphs54(f)(a)(i), (c) and (d) and 60(f)(a)(i), (c) and (d). The balance of the application isdeclined.[38] There is no reason why the costs of the application ought not to be determinednow. At least on the basis of the materials currently before the Court, costs ought tofollow the event in the ordinary way, on a 3B basis.10 Again, on the materials presentlybefore the Court, I cannot see any basis for increased or indemnity costs. I wouldcertify for second (but not third) counsel.[39] If the parties cannot agree costs, Carter Holt is to file and serve a memorandumon costs within 10 working days of the date of this judgment. Any memorandum inresponse from the Ministry is to be filed and served within a further five working days.I will thereafter determine costs on the papers.____________________Fitzgerald J10 I do not consider 3C to be appropriate. There was nothing particularly complex about the presentapplication, and it was dealt with in a fairly brief amount of time.