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High Court of New Zealand Decisions |
IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
CIV-2006-485-233
BETWEEN GAVIN AUSTIN HOARE, GRAHAM
LAURENCE HOARE, BRENT
PAUL
HOARE, DEANE REX HOARE AND
BRIAN KEVIN BOYER
AS TRUSTEES
OF THE HOARE TRUSTS
PARTNERSHIP
Plaint iffs
AND HEIDELBERG GRAPHIC EQUIPMENT
LIMITED
Defendant
Hearing: 12 October 2006
Appearances:
A.S. McIntyre and M.J. Francis for Plaintiffs
P. Hunt for Defendant
Judgment: 9 November 2006 at 3.00pm
In accordance
with r540(4) I direct the Registrar to endorse this judgment with a
delivery time of 3.00pm on the 9th day of November 2006.
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
Introduction
[1] The defendant applies to strike out the plaintiff's
claim under Rule 186 High
Court Rules.
[2] The application is opposed by the plaintiffs.
HOARE & OTHERS AS TRUSTEES OF THE
HOARE TRUSTS PARTNERSHIP V HEIDELBERG
GRAPHIC EQUIPMENT LIMITED HC WN CIV-2006-485-233 9 November 2006
Background Facts
[3]
The plaintiffs are the owners of commercial premises at 81 The Esplanade,
Petone ("the property").
[4] The property
was leased by the plaintiffs to Format Print, which is a division
of Blue Star Print Group (NZ) Limited ("Format").
[5] Format
operated a commercial printing business at the property.
[6] The defendant supplies and services printing presses.
[7]
Following the supply of a Heidelberg Speedmaster 8 printing press to Format
by the defendant, Format had a maintenance contract
with the defendant. On
Saturday 7 August 2004 pursuant to that contract, the defendant worked on this
printing press
at the property.
[8] On Sunday 8 August 2004 there was a fire at the property which caused
significant damage.
[9]
The plaintiffs' insurance company indemnified the plaintiffs for this loss.
[10] The parties accept that for the purposes
of this present strike out application,
it is assumed that in working on Format's printing press at the property on Saturday
7 August
2004, the defendant was negligent and that its negligence caused the fire
the next day.
[11] No contractual arrangements existed
between the plaintiffs and the defendant.
The defendant was a service provider admitted onto the premises by Format as
tenant.
[12] Two contracts are of possible relevance here. At the time of the fire, there
was in force a Deed of Lease ("the lease")
between the plaintiffs and Format. This
lease contained an indemnity provision which stated:
7. The tenant shall indemnify
the landlord against all damage or loss
resulting from any act or omission on the part of the tenant or the
tenant's employees, contractors or invitees. The tenant shall
recompense the landlord for all expenses incurred
by the landlord in
ma king good any damage to the property resulting from any such act
or omission.
The tenant shall be liable to indemnify only to the
extent that the landlord is not fully indemnified under any policy
of
insurance.
[13] The other contract in force at the time was a maintenance and servicing
agreement dated September
2004 ("the maintenance agreement") between the
defendant and Format. This maintenance agreement set out the arrangements
between
those two parties as to the servicing by the defendant of the printing press
which it had sold to Format.
[14] The maintenance
agreement effectively provided:
a) For the exclusion of any warranties or conditions in relation to goods
or services; and
b) For any civil liability to be limited in the case of services to either
supplying the services again,
or paying the cost of having the services
supplied again. There was to be no liability for any indirect or
consequent ial loss whatsoever.
[15] In addition, clause 9 of the maintenance agreement set out Format's
responsibilit
y as customer to include:
a) The equipment was to be operated in accordance with operating
instructions.
b) The equipment was not to be repaired or modified in any way by
persons not authorised by the defendant
company.
c) Operator maintenance schedules were to be strictly adhered to.
d) The defendant was to employ
sufficiently qualified personnel for the
running of the equipment according to the manufacturer's
specifications.
[16] According to the defendant, in accepting under the maintenance agreement
that the defendant
limited any civil liability it may have to the cost of supplying the
services again, Format effectively accepted that it had extremely
limited rights
against the defendant. That necessarily included limited rights in the event that
Format suffered loss or liability
in the event of a fire occurring, as happened here.
[17] In addition, the defendant maintains that under clause 7 of the lease,
Format
as tenant assumed the risk of a contractor such as the defendant here causing fire to
the property. That assumption of risk
was expressly negatived, however, in the event
of insurance cover existing. The defendant's argument follows that the contract
created
by the lease deals with the allocation of risk for the very event which has
occurred here, and the outcome is that the risk is borne
by the insurance company.
Counsel's Arguments and My Decision
[18] The principles of law governing applications to strike out
pleadings are well
settled. Rule 186 of the High Court Rules provides:
186. Striking out pleading
Without prejudice
to the inherent jurisdiction of the Court in that regard,
wher e a pleading--
(a) Discloses no reasonable
cause of action or defence or other case
appropriate to the nature of the pleading; or
(b) Is
likely to cause prejudice, embarrassment, or delay in the
proceeding; or
(c) Is otherwise an abuse
of the process of the Court,--
the Court may at any stage of the proceeding, on such terms as it thinks fit,
order
that the whole or any part of the pleading be struck out.
[19] A strike out application is to be heard on the basis that the facts
alleged in the
statement of claim are true. It is well settled that before the Court may strike out
proceedings the causes of action
must be so clearly untenable that they could not
possibly succeed - Attorney-General v Prince and Gardner [1998] 1 NZLR 262 at
267. The strike out jurisdiction is one to be used sparingly, and only in a clear case
where the Court is satisfied it has the
requisite material - Electricity Corporation Ltd
v Geotherm Energy Ltd [1992] 2 NZLR 641 - but will not be precluded by the
applicat ion raising difficult questions of law requiring extensive argument - Gartside
v Sheffield,
Young & Ellis [1983] NZLR 37 (CA).
[20] Importantly, in considering r186 McGechan on Procedure at para
HR186.02(1)(e) notes:
...the Court should be
very slow to rule on novel categories of duty of care
at the strike out stage. Empirical evidence and other expert evidence
ought
to be properly tested, in helping the Court make the right public policy
choices. To similar effect, Barker J
held against the striking out of a claim in
a developing area of law `on assumed facts and scanty pleadings' in Bryan v
Philips NZ Ltd [1995] 1 NZLR 632...
[21] In the defendant's strike out application the essential ground put forward in
support was:
The plaintiff's claim
discloses no reasonable cause of action against the
defendant as the contractual matrix between the parties and
Format...precludes
the existence of a tortious duty of care by the defendant
to the plaintiff. The imposition of a tortious duty of care in this
instance
would be contrary to the allocation of risk that the parties had agreed upon in
their respective contracts...
[22] Here the defendant maintains that in commercial situations such as the
present one, the contractual matrix can determine
the scope of any tortious duty of
care. The defendant says that the Court should not allow the plaintiffs to go beyond
the allocation
and/or assumption of risk agreed between the parties by way of a duty
of care. Here, the defendant contends that the separate contracts,
being the lease and
the maintenance agreement, provided that Format would:
a) Bear the risk of any loss caused by contractors,
and in this case the
defendant; and
b) Indemnify the plaintiff for any property damage caused by Format,
its
emplo yees, invitees or contractors, although this indemnity would be
negated in the event insurance
coverage applied.
[23] The defendant claims that it would be inconsistent for the plaintiff to
effect ively bypass the indemnity
and insurance arrangements by suing the defendant
direct ly.
[24] The defendant's argument is principally:
a)
In the maintenance contract, Format accepted that the defendant
excluded all warranties and conditions in relation
to the services
provided. Format also accepted that any civil liability was limited to
the cost of
supplying the services again. This effectively must mean
that Format acknowledges and accepts that it has extremely
limited
rights against the defendant. That must necessarily include limited
rights in the event that
Format suffers loss or liability in the event of a
fire as occurred here.
b) Relying on clause 7,
the indemnity provision in the lease, there has
been an allocation of risk here to negate any duty of care on the
part
of the defendant. Format has assumed the risk of a contractor (such as
the defendant here) causing
fire. As has been noted, however, that
assumpt ion of risk is expressly negatived in the event of insurance
cover.
c) The defendant contends that it must follow that the contract deals with
the allocation
of risk for the very event which has occurred here the
fire. The defendant argues that the outcome is that the
risk is borne by
the insurance company.
[25] The defendant concludes, therefore, that in the circumstances
of this case, a
duty of care should not be imposed on the defendant.
[26] The starting point when considering the imposition
of a duty of care is
whether it is fair, just and reasonable in the circumstances to impose such a duty
Rolls Royce New Zealand
Limited v Carter Holt Harvey Limited [2005] 1 NZLR
324.
[27] In considering whether it is fair, just and reasonable to impose a duty, the
Courts have adopted a two-stage test:
a) The first area of inquiry is as to the degree of proximity or
relat ionship between the parties.
b) Secondly, the Court enquires into whether there are other wider policy
considerations which would tend to
negative, restrict or strengthen the
existence of a duty of care in the particular class of case in question.
[28]
This test was considered recently in Rolls Royce, where the Court of Appeal
noted that:
a) The enquiry into proximity
is concerned with the nature of the
relat ionship between the parties. Relevant considerations in
determining this question are foreseeability, the degree of analogy
with existing cases in which duties are already
established, the
vulnerabilit y of the plaintiff (in the sense that the plaintiff could not
protect itself
from the risk of injury), the statutory/contractual
background, the nature of the loss (that is physical damage as
opposed
to pure economic loss), and the balancing of a plaintiff's claim to
compensat ion for avoidable
harm and the defendant's moral claim to
be protected from undue restrictions on its freedom of action and from
an undue burden of legal responsibility.
b) Relevant policy considerations include the need for commercial
certaint y, the issue of indeterminate liability, and the context in which
the duty of care is said to
arise.
[29] The Court of Appeal acknowledged in Rolls Royce that this two-step enquiry,
however, is only a framework. It is not
a straightjacket to be slavishly followed.
[30] Turning to consideration of the contractual matrix in the present case, the
defendant's
contention is that the contractual structures which underlie the parties'
relat ionships with each other are the key proximity considerations
here.
[31] The defendant's submission is that there is clear authority that a duty of care
will not be imposed in a commercial
context, when to do so would be inconsistent
with the allocation/assumption of risk agreed to between the parties as evidenced by
the broad contractual matrix. The rationale for this principle is said to be that a
plaint iff should not be able to circumvent either
a contractual bargain or even a non-
contractual but clear understanding between the parties as to where the risk should
lie see
Rolls Royce at paragraphs 121 and 122.
[32] In the present case, the defendant contends that the parties involved here are
all
more or less of equivalent commercial bargaining strength, and taken as a whole
they agreed that the allocation of risk between them
under the maintenance contract
and the lease would be as follows:
a) Format accepted the risk that the defendant would
cause loss and/or
liabilit y to it.
b) But for insurance, Format accepted the risk that its employees,
invitees or contractors might cause property damage through fire to
the plaintiff as landlord.
c) Effectively, by both contracts, Format accepted the risk of its
contractor, the defendant, causing loss,
and to allow the plaintiff as
landlord to directly sue the defendant is cutting across this contractual
allocat ion of risk.
[33] The defendant submits that it would be inconsistent with the broad
contractual matrix if the plaintiff
landlord's insurance company acting under
subrogated rights acquired from the plaintiff were able to sue the defendant here in
tort.
[34] Put another way, the defendant says the lease effectively provides that the
actions of Format's employees, invitees
or contractors are deemed to be the
responsibilit y of Format, and to separately hold one of those parties responsible (for
example to the landlord) is contrary to that
express assumption of responsibility by
Format.
[35] The defendant maintains that there are also policy considerations that
point
against the imposition of a duty of care in the present instance.
[36] Before me the defendant appeared to place considerable
reliance upon the
principles developed in Rolls Royce.
[37] In Rolls Royce, Carter Holt Harvey Limited entered into a contract
with
ECNZ and another ("the co-generation contract") to procure the design, manufacture
and commissioning of an industrial plant
by Rolls Royce at Carter Holt's mill.
Shortly afterwards, ECNZ entered into a separate contract with Rolls Royce for the
design,
construction and commissioning of the plant ("the Turnkey contract").
[38] The plant when completed proved to be unsatisfactory.
Carter Holt Harvey
Limited sued Rolls Royce in negligence, alleging that the plant was defective and did
not conform to the contractual
specifications. In essence, Carter Holt Harvey
Limited was claiming that Rolls Royce had breached a duty to perform its
contractual
obligations with ECNZ.
[39] There was no direct contractual relationship between Carter Holt Harvey
Limited and Rolls Royce.
This was despite the co-generation contract being entered
into on the basis that Rolls Royce would be the subcontractor.
[40]
In its proceeding Carter Holt Harvey was thus attempting to find a duty of
care on the part of Rolls Royce arising out of the contractual
arrangements to which
Carter Holt was not a party.
[41] In Rolls Royce the Court of Appeal took into account the fact that Rolls
Royce had special skills in constructing plants of this kind, and that there was a close
personal contact between personnel from
Rolls Royce and Carter Holt Harvey. The
Court of Appeal also accepted that in the circumstances of that case, there was a high
degree
of foreseeability of the harm which occurred, but notwithstanding that, the
Court still did not find that a duty of care existed.
Furthermore, the Court said there
were no concerns about there being indeterminate liability in that case to an
indeterminate number
of plaintiffs.
[42] Instead, the Court of Appeal identified the strongest factor against such a
duty as being the contractual
structure between the parties, and the most persuasive
policy consideration as being the need for commercial certainty. In other
words, the
Court found that commercial parties normally are entitled to expect that the risk
allocat ion they have negotiated and
paid for will not be disturbed by the Courts.
[43] The Court of Appeal struck out the claim against Rolls Royce.
In the
decisio n there were essentially four reasons given which militated against the
proposed duty of care in negligence:
a) It was the very contractual structure agreed to by the parties that made
loss to Carter Holt Harvey foreseeable
and this pointed away from any
duty of care in tort. The parties involved were sophisticated
commercial
parties. Carter Holt made the decision not to enter into a
direct contract with Rolls Royce, perhaps because it thought
it was
sensible commercially for the main burden of enforcement to rest with
ECNZ rather than with
it. The co-generation agreement contained
important provisions to protect Carter Holt's position. This might be
seen as pointing to an intention that these possible contractual rights
should be the only direct rights
that Carter Holt would have against
Rolls Royce.
b) The terms of each of the contracts differed in various
respects, and
both contained limitation clauses. Carter Holt had only paid for what
was to be provided
under the co-generation contract. An important
finding was that it should not, therefore, be able to improve on its
bargain
by direct suit against a stranger to the contract Rolls Royce.
And so far as the Turnkey contract was concerned,
the Court of
Appeal found that the limitation clause there could impact on Carter
Holt, even though it
was not a party.
c) In the circumstances of that case, it was not clear how to determine
the appropriate
standard of care. A difficulty in setting quality
standards in cases involving contractual specifications had
long been a
reason for not imposing a duty of care in the kind of case under
consideration. This problem
was acute in commercial construction
contracts for specialist plant with detailed specifications. This factor
weighed significantly against a duty being recognised.
d) There was a need for commercial certainty. Commercial
parties were
normally entitled to expect that the risk allocation they had negotiated
and paid for would
not be disturbed by the Courts.
[44] In conclusion, the Court of Appeal held that in applying the principles to the
facts, there
could be no duty in tort owed by Rolls Royce to Carter Holt simply to
take reasonable care to perform its contract with ECNZ.
[45]
Turning now to consider the present case, the situation in Rolls Royce, in my
view, differs somewhat from the situation before
the Court here.
[46] First, I am satisfied that the foreseeability of loss to the plaintiff in this case
did not arise by virtue
of the contractual structure between the plaintiff and Format
on the one hand, or between Format and the defendant on the other.
There is no
question that it was generally foreseeable that a lack of reasonable care by the
defendant in carrying out its work at
the property might cause fire and damage to the
building. The defendant's special expertise might also be seen as a factor of some
relevance here, but the plaintiffs of course had no knowledge or control over this
aspect in any way.
[47] Unlike the situation
in Rolls Royce, the plaintiff here did not in any active or
conscious way choose not to enter into a direct contract with the defendant
when it
could have. The plaintiff is likely to have known little of the arrangements between
Format and the defendant. Further, there
is nothing in the lease between the plaintiff
and Format which could be seen as pointing to an intention that the plaintiff's rights
as against the defendant would be contractual in nature, and would be the only rights
that the plaintiff would have against the defendant.
Indeed, it is important here that
the defendant was a contractor employed solely by Format to service its machinery,
and is unlikely
to have known anything of Format's lease arrangements.
[48] The next point relates to the fact that the lease between the plaintiff
and
Format and the maintenance agreement between Format and the defendant were
ent irely independent. Neither contained what could
be in any way described as inter-
linking clauses. And, unlike the finding in Rolls Royce, the present case is not one
where the
plaintiff purports through this action in tort to improve upon its contractual
posit ion.
[49] Next, in my view it is important
that there is no evidence here that the
plaint iff was in any way influenced in entering into the lease by the content of
arrangements
between Format and the defendant, even if, as appears unlikely, it
knew of such arrangements. Therefore, it is difficult to say,
due to this lack of notice
on the part of the plaintiff, that it has in any way acquiesced or accepted the terms
under which Format
contracted with the defendant. And, it follows from this that,
there is no contractual matrix here, or agreement to allocate risk
which spreads
across or affects all three parties, as was found in the Rolls Royce case.
[50] The present case, as I see it, involves a relatively straightforward
issue as to
the standard of care required. This is a case involving negligent work leading to
physical damage, and standards of care
in these cases are imposed by the Courts on a
regular basis. This contrasts with the situation in commercial construction cases
ment
ioned in the Rolls Royce decision, and the acknowledged difficulty in those
situations of setting appropriate quality standards which
leads to this issue becoming
a factor militating against imposing a duty of care in cases of that type.
[51] And finally, in
my view, the present case is not one where the need for
commercial certainty features to any special degree. There is no doubt that
the
plaint iff and Format as its tenant gave consideration to allocating risk between them
when their lease was negotiated. Format
as tenant in meeting the insurance premium
on the building effectively paid for the protection it received from the plaintiff's
insurer.
[52] There is no evidence, however, to suggest that either:
a) The plaintiff when executing the lease contemplated
or thought that it
was ousting the possibility of suing a stranger to the contract for
damaging the
property; and
b) That the defendant in entering into the maintenance agreement with
the defendant had
in mind the provisions of the lease and/or entered
into that arrangement on the basis that it was somehow relieving
itself
of any tortious duty that might be owed to the plaintiff as owner of the
property in which the
work was carried out.
[53] In suggesting that no duty of care exists here, the defendant relies upon cases
including Rolls Royce,
Simaan General Contracting Company v Pilkington Glass
Limited (1988) 1 AllER 791 (CA), Wilcock Street Investments Pty Ltd v CDG Pty
Ltd [2004] HCA 16; (2004) 78 ALJR 628, R.M. Turton & Co v Kerslake [2000] 3 NZLR 406, and
Three Meade Street Ltd v Rotorua District Council [2005] 1 NZLR 504, being cases
invo lving the well-known contractual matrix which exists in commercial
construction contracts involving an owner, main
contractor, builder, subcontractors
and so on. The rationale for the approach taken by the Courts in these situations
where one contracting
party attempts to sue another party in tort, is that the network
of contractual relationships normally provides appropriate and sufficient
duties of
redress, without the need for supervening tort duties. In the present case, I am
satisfied that that is simply not the
case. This is not a commercial construction case.
It involves maintenance work by the defendant (a stranger to the plaintiffs) on
Format's machine situated at the plaintiff's property, work which for the purposes of
the present application was carried out negligently
and caused damage to the
property.
[54] Before me, the defendant also appeared to rely upon cases where a
subcontractor had contracted
with a head contractor, knowing when it did so, that the
building owner had accepted the risk of damage by fire to the premises in
the main
contract with the contractor see Norwich City Council v Harvey & Others (1989) 1
AllER 1180. In my view, this line of cases is of little help in the present case. This
is not a head contract/subcontract case. And here, no
evidence is before the Court in
particular that the defendant had that knowledge of the risk acceptance when
entering into the maintenance
arrangement.
[55] And, in considering whether the defendant's duty in tort has been limited or
excluded here in relation to a
non-contracting party, clearly there is no evidence
before the Court that the defendant had given notice to the plaintiff via the
lease
between the plaintiff and Format or otherwise, that the defendant would not be liable
to the plaintiff for negligence. Any
attempts by the defendant to limit its liability for
negligence with respect to the acts which occurred must be limited to the contractual
terms it specifically concluded, and there is no doubt that these were entered into
with Format alone. It can hardly be said that
the defendant gave reasonable notice to
the plaintiff through the standard form lease, to which it was not a party, that it
would
not be liable.
[56] Nor, in my view, can the defendant rely here on the provisions of the
Contracts (Privity) Act 1982. First,
this is not pleaded. But secondly, and in any
event, it could not properly be argued that the defendant under the circumstances
here
should have the benefit of s4 Contracts (Privity) Act 1982, because:
a) On a proper construction, the indemnity clause
in the lease (clause 7)
confers a benefit on Format as tenant and on no other party designated
or otherwise;
and
b) Applying the proviso to s4 of the Act on a proper construction of the
lease, it was not intended
to create in respect of any such benefit an
obligat ion enforceable at the suit of the defendant.
[57] Further,
as I see it, no evidence is before the Court to suggest in any way that
the plaintiff has acted in a manner as to accept or acquiesce
in the service
arrangements under the maintenance agreement between Format and the defendant.
Indeed, as I have noted above, there
is no evidence to suggest that the plaintiff was
even aware of the nature and content of those arrangements.
[58] In summary
then, and reminding myself that as the present application is one
for strike out, the plaintiff's causes of action must be found
to be so clearly untenable
that they could not possibly succeed, I am satisfied that the plaintiff has done enough
to show that arguably
a duty of care exists here which has not been displaced by the
parties' contractual arrangements, and this is a matter therefore
which should
proceed to full consideration at trial.
[59] It is well established that repairers of articles, such as the defendant
here, owe
a duty to ensure that the article is reasonably repaired, and that the major
consequences of a fire resulting from a repairer's
negligence do not occur
Haseldine v C.A. Daw & Son Limited (1941) 2 KB 343, Glow Vision Displays
Limited v Signopsys (NZ) Limited (HC Hamilton, 1 August 2000, A153/99,
Penlington J). And, in the Law of Torts
in New Zealand Todd, 4th ed. at p137 the
learned authors state:
A duty (of care) equally is likely to be owed to an owner
where a person
negligently causes physical damage to a building, or physical damage to or
loss of personal property.
For the purposes of the present application, this case is acknowledged to be one
where such physical damage has occurred.
[60]
The consequence here for the plaintiff's insurer, if the present strike out
applicat ion was to succeed, is that it would be left
without a remedy for the
negligence of the defendant. The only remedy otherwise available to the plaintiffs
themselves would be
a claim against their insurer, assuming the insurance cover was
current and covered the risk. There is no other party that could
be sued.
[61] When one considers the rationale outlined in Rolls Royce, that result would
be undesirable for a number of reasons.
In the Rolls Royce case, there were at least
contractual remedies available to Carter Holt, and this aspect was instrumental in the
Court finding that factors militated against the imposition of a duty of care. In the
present case, the plaintiff has been indemnified
for its loss by its insurance cover. I
need not deal here with any issues of double recovery these matters, if relevant, are
for
consideration at substantive hearing. The position of the plaintiff's insurer is also
a matter for consideration there. Suffice to
say that for the purposes of the present
strike out application, I see nothing inconsistent in requiring to proceed for
consideration
at trial possible arguments over whether the plaintiff landlord here
through its insurer, because of the insurance risk it has assumed,
may have no right
of action against the defendant.
[62] And, taking a wider perspective, if the current strike out application
was to be
upheld, in my view there could be significant implications for the commercial
communit y, and more particularly commercial
property owners and insurers. The
proposit ion that a commercial landlord may not be entitled to sue a negligent
contractor visiting
its premises to carry out inherently dangerous work for a tenant,
and causing fire or other physical damage, would no doubt come
as an unwelcome
shock. In these circumstances, landlords and their insurers would need details of the
ent ire contractual arrangements
of each tenant. In particular, details of all service
and other contracts entered into by tenants around the building would be required.
It
is possible that contracts for every invitee of a tenant would require scrutiny. In my
view, this is unmanageable. If such an
outcome were to result, as I see it, the only
way this would be justified is where, as in Rolls Royce, there is a contractual
scenario
in place whereby known risks have been identified and accounted for in the
contractual relationships across all involved parties,
and where each party has full
knowledge of the other's obligations and risk allocation. That is not the case in the
present situation.
[63] I remind myself, as noted in paragraph [20] above, that in considering r186
relat ing to strike outs, McGechan on Procedure
at paragraph HR186.02(1)(e)
suggests that:
...The Court should be very slow to rule on novel categories of duty of care
at the strike out stage. Empirical evidence and other expert evidence ought
to be properly tested, in helping the
Court make the right public policy
choices.
[64] The strike out jurisdiction is one to be used sparingly, and only in
clear cases
where all the requisite material is before the Court. Here, I am satisfied that the
plaint iff has put before the Court
enough to suggest a tenable argument that it is fair,
just and reasonable in the circumstances of the present case to impose a duty
of care
upon the defendant in terms of the principles outlined in Rolls Royce.
[65] That said, and for the reasons outlined above, I find that the defendant
has
been unable to show that the plaintiff's case as pleaded is so clearly untenable that it
could not possibly succeed when applying
the established strike out test outlined in
Attorney-General v Prince and Gardner.
[66] The defendant's strike out application
therefore fails.
[67] As to costs, the plaintiffs having succeeded in opposing the defendant's strike
out application, I see
no reason here for departing from the usual position that the
successful plaintiff is entitled to an award of costs. Costs are therefore
awarded
against the defendant upon a category 2B basis, together with disbursements, if any,
as approved by the Registrar.
________________________________
Associate Judge D.I. Gendall
Solicitors:
Collins & May Law Office, Lower Hutt for Plaintiffs
McElroys, Auckland for Defendant
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