While it is up to the party seeking to be removed to prove that it is fair and appropriate that they be removed, it begs the question: What does “fair and appropriate” mean?
Over the years, the WHT and High Court have developed a number of principles or guidelines upon which it will assess whether it is fair and appropriate that a respondent be removed from a proceeding.
Two recent High Court decisions (Fenton v Building Code Consultants Ltd, HC, Auckland, CIV/2009-404-6348, March 15, 2010, and Yun v Waitakere City Council, HC, Auckland, CIV/2010-404-5944, February 15, 2011) provide particularly useful reading on the principles that will be applied to determining removal applications.
While some of the key removal application principles are noted below, what has become abundantly clear over the years is that a party who wants to be removed from a proceeding needs to have a very clear and unequivocal defence available to them before deciding to make the application.
The most obvious example is where the respondent has a limitation defence available to them — ie, more than 10 years have lapsed since they carried out work on the property.
Where a respondent seeks to be removed merely based on an arguable defence, it is almost inevitable that the removal application will fail.
Principles of Removal
A number of factors will be taken into account in removal applications. These include:
• Whether there is a reasonable cause of action disclosed in the claim documents,
• The likelihood of success against the party seeking removal,
• Whether the application is vexatious or frivolous,
• The likelihood of prejudice or delay,
• Whether the claims being made are relevant and intelligible, and
• Whether there are any issues of undue complexity caused by a proliferation of parties.
How these factors are ultimately applied, of course, depends on the facts and circumstances of each case. However, in relation to the “facts”, the key principle that creates the most difficulty for a party seeking to be removed is that the removal application will proceed on the assumption that the facts as pleaded by the claimant are true.
Where the respondent disputes the pleaded facts (and that dispute cannot be resolved without hearing evidence from witnesses), the removal application will generally fail on the basis that the respondent needs to remain a party so that full evidence can be heard at trial.
While the WHT is investigative in its approach such that it may be prepared to consider the evidence before it in deciding a removal application, commonly, a party who objects to the removal application will be able to file affidavit evidence which results in a conflict on the affidavit evidence.
For example, the builder says in his affidavit that the plasterer installed inadequate sill flashings whereas the plasterer says in his affidavit that, in fact, the builder installed these sill flashings.
Then, there exists a conflict of evidence, and the objecting party will satisfy the WHT that the party seeking to be removed must remain in the proceeding until full evidence can be heard to determine liability.
Conclusion
While the removal process certainly has an important part to play in leaky building claims, the process is often (and unfortunately) misunderstood by respondents who do not fully appreciate the very high threshold needed to be removed.
Respondents who are therefore considering a removal application need to carefully weigh up the chances of success against the potential costs of making that application, and whether it would be more practical to reserve their resources for mediation and/or adjudication.
It should be remembered that the evidential burden reverts back to the claimant at adjudication and, tactically, not to mention economically, it may serve the interests of the respondent better to argue his or her best defences to liability first at mediation (if a mediation takes place) and then, if necessary, at adjudication where the onus is back upon the claimant.
Note: This article is not intended to be legal advice (nor a substitute for legal advice). No responsibility or liability is accepted by Legal Vision to anyone who relies on the information contained in this article.
