15 Hopetoun Limited v Visser
[2018] NZHC 1601
•29 June 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-002657
[2018] NZHC 1601
BETWEEN 15 HOPETOUN LIMITED
Appellant
AND
FREDERIK VISSER
Respondent
Hearing: 18 April 2018 Appearances:
R D Butler for the Appellant J Spring for the Respondent
Judgment:
29 June 2018
JUDGMENT OF HINTON J
This judgment was delivered by me on 29 June 2018 at 5.00 pm pursuant to Rule 11.5 of the High Court Rules
…………………………………………………………………… Registrar/Deputy Registrar
Counsel/Solicitors:
Rowan Butler, Barrister, Auckland Minter Ellison Rudd Watts, Auckland Gregory Simon Law, Auckland
15 HOPETOUN LIMITED v FREDERIK VISSER [2018] NZHC 1601 [29 June 2018]
[1] This is an appeal against a summary judgment entered in the District Court by Judge Harrison on 16 October 2017.1 The judgment was for $45,199.30, being the cost of remedial works to an apartment constructed for Mr Visser by 15 Hopetoun Limited (15 Hopetoun) at 15 Hopetoun Street.
[2] On about 9 October 2015, the parties entered into a sale and purchase agreement for two apartments (converted into one) for $1,580,000. Variation works were carried out to the apartments, for which Mr Visser paid $60,093.50.
[3] Mr Visser was not happy with the variation works. He sought and obtained summary judgment for the $45,199 cost of “remedial work”, on the basis that the documentation established agreement by 15 Hopetoun to pay for those costs. The Judge concluded that 15 Hopetoun had no arguable defence.
[4] Both counsel agree that the case comes down to a simple question of what the documents say, and whether they establish an agreement that 15 Hopetoun would pay for the specific remedial works.
[5] Mr Spring says that the Judge was right in finding that there was a clear agreement, referring particularly to what he described as three “contractual emails” sent by Mr Mike Mahoney, director of 15 Hopetoun, on 18 December 2015, 22 February 2016 and 25 May 2016.
[6] Mr Butler says that no agreement was reached, or at least such a position is arguable. If he is right, then the matter should proceed by way of an ordinary hearing at which full evidence can be heard as to whether agreement was reached and the Court can consider whether 15 Hopetoun in any event had an obligation to pay for the remedial works, or some part of them.
The documents
[7] On 3 September 2014, Mr Yeo of Tawera Group, the project manager for the Hopetoun development, emailed Mr Visser attaching a drawing showing the requested
1 Visser v 15 Hopetoun Limited [2017] NZDC 23386.
purchaser variations. He said that the steps to completing the variation must all be completed and set those out, including the need to sign off on the final floor plan.
[8] On 4 September 2014, Mr Visser replied to Mr Yeo saying he should talk to David Mahoney (a director of 15 Hopetoun) because the plan emailed was nothing like the plan that they drew up with him. Mr Visser referred to some differences.
[9] On 24 September 2014, Mr Yeo emailed Mr Visser with a list of purchaser variations to the apartments. The variations were to be carried out by Summit Construction Limited, 15 Hopetoun’s contractor. Mr Yeo asked Mr Visser to review the notes from the meeting that day. He asked that Mr Visser add any omissions directly to his notes below and he set out 22 points under different headings.
[10] It seems that the variations were then completed and on 3 November 2015, Mr Visser paid the sum of $60,093.50 for the variations.
[11] Contending that the variations were not completed to a workmanlike and satisfactory standard, Mr Visser requested 15 Hopetoun to undertake remedial work.
[12] In the process, if not earlier, considerable discord developed between the parties.
[13]On 18 December 2015, Mr Visser wrote to Mike Mahoney saying:
There is truly no need to tell me the ramifications of any legal action and I have made every effort to avoid this. I may well be the only one to come forward right now, but there is a huge amount of discontent amongst the owners already and you will get more of these emails shortly if what some owners tell me is correct.
[14]Also on 18 December 2015, Mike Mahoney replied saying:
… I am very happy to be accountable for the remedials, as I have done in 20 projects.
I agree the remedials are taking time, but we intentionally changed the site from one of a construction methodology to one of a residential one and that takes time – but is cleaner.
Charlie could use some horse power and I'm meeting the builder at 10.00 Monday to review their game plan.
I disagree with an obligation to inform you re Shears and Mak. They are Summit’s sub and we and certainly not a buyer has any contractual interest.
Happy for you to attend our Monday meeting to address your issues directly with the principal of Summit – let know.
We are never going to please everyone, but I value our reputation and the items you mentioned – don't amount to much work and with respect are minor items in the overall project – so should be remedied promptly.
[15] Very shortly after that email, Mr Visser replied saying he was very happy to attend the meeting with Summit.
[16] On 22 February 2016, Mr M Mahoney wrote again to Mr Visser copying various people, including John Carter, who was Summit’s representative. Summit had undertaken the variation work. Mike Mahoney thanked Mr Visser for meeting with John Carter and himself. He said:
Most of the works suggested come down to communication lapses. For where we have erred, I am very sorry.
However, I have taken the time to meet with Greg and review all signed documents in the file. There are several ambiguities to your side of events.
To recap:
1/ Kitchen bench top. We agree to change as per specification. Colour sample to be agreed with John.
2/ Kitchen alteration to align with fridge. John Carter has agreed to sort out.
3/ Kick space hinge under oven is not a remedial. It was designed as a fixed panel. If you wish to hinge, then it’s a variation.
4/ Splashback: We agree to change (including shifting power points to side).
5/ Fridge unit to lounge. Drawing signed by you does not show any cabinetry to fridge. Summit will change top to match new kitchen top only.
6/ Marks on windows – weld marks – Summit to resolve.
7/ Ensuite vanity> Drawing signed by you shows a 1200 wide unit not 1800 which Chrissie wanted. I will however discuss vanity with Franklins as to poor performing surface and revert.
8/ LED lights. The variation was for a lighting dimmer. The lights installed are not compatible with a dimmer. Client to change.
Frits, you mention you have a number of emails. However, contractors and subcontractors require signed plans and elevations to record and instruct, otherwise items will be missed.
[17] On 1 April 2016, Mr Visser obtained a quote from Affin Group which was directed to John Carter of Summit, totalling $44,124. The quotation lists seven items, being “fridge surround; new kitchen bench top; new island unit top and waterfalls; changes to the drinks cabinet; changes to the bathroom cabinet; wine cabinet, and vanity”. This quote was sent also to 15 Hopetoun.
[18] On 21 April 2016, Zane Kennedy of Minters, solicitors for the Vissers, wrote to Mike Mahoney referring to a discussion of several weeks ago. He said he had regrettably been in a hearing which prevented him from reverting to Mr Mahoney earlier. He pointed out that the Vissers paid for variations which Mike Mahoney apparently thought they had not. Mr Kennedy said:
You personally have already accepted responsibility to attend to the variations in your email of 18 December 2015 (annexure D to my earlier letter) and you provided further details in your email of 22 February 2016 (annexure E).
However, for reasons you didn't make clear in your call to me, you now refuse to instruct the agreed third party to attend to those variations.
You will understand that this leaves the Vissers in an entirely unsatisfactory position. They have no desire to go to Court but have no choice given that they have not received what they contracted for. I also cannot see what the defence is given your acceptance of the obligations in your email correspondence. …
If we do not hear from you within five days, I will presume that you have no interest in doing so. In that event, reliance will be placed on this correspondence going forward.
[19]On 22 April 2016, Mike Mahoney replied to Zane Kennedy saying:
David Mahoney was involved in the day-to-day dealings with Frits. He is away on school holiday until next week. Our view is entirely different to that of your client. It’s a view shared by the main contractor, our project manager and indeed members of his own BC committee.
I suggest David meets you next week to review. Leaving the arithmetic out of the equation, the logistic issue is that even if Frits is correct, no contractors will work for him, as everyone has had an issue – even the curtain company reported he caused them grief!
[20]On 28 April 2016, Zane Kennedy replied to Mike Mahoney saying:
Your comments about our clients are rejected. They report having a good working relationship with Tawera’s contractors but a great deal of frustration in dealing with Tawera. They are also aware that there is a good deal of dissatisfaction amongst other apartment owners regarding the bench tops and splash backs being inferior to those originally specified in the plans.
In any event, our clients are entitled to what they contracted for and this has been acknowledged in a number of emails from Tawera, including Greg, David and you. The quote from Affin Group was obtained by them following discussions with Tawera. Can you confirm that they can now instruct Affin Group to go ahead with this work?
In the interests of resolving this matter without further delay, our clients are also prepared to meet the costs of the wine rack themselves and to not take issue with the kitchen being constructed to the wrong dimensions in the first place.
[21]On 29 April 2016, Mike Mahoney wrote to John Carter:
The circus continues.
Please confirm Affin are picking up the cost of the kitchen bench and splash back as noted above. Hopefully this will put an end to it.
Has there been any other bench complaints of late?
[22]Mr Carter replied on 29 April 2016 saying:
Mike, there has been no further discussions with any other owners for many weeks re bench tops so as far as we are concerned this matter is closed now in regards 11B. Comments as follows:
1. Splash back is nothing to do with Affin or us really for that matter – Frits sort pricing from the suppliers directly for a glass and as far as I know is proceeding with the installation himself. Discussion with supplier earlier in the week seemed to confirm this.
2. Bench top – Affin will replace the cracked top with similar product but that is as far as they or us want to go with it.
[23] On 29 April 2016, Mike Mahoney then wrote to Zane Kennedy copying Dave Mahoney and John Carter:
The main contractor has confirmed they will (via Affin) replace the kitchen bench. He reports further there have been no complaints from other owners re kitchen benches – except the odd comment regarding cleaning materials. He also comments they don't wish to have anything to do with Visser.
We will without any admission of liability replace the splash back provided we are supplied prior to manufacture a costing breakdown and specification
on the material eg glass thickness and the number of glass penetrations being sought by Visser.
This is the only splash back being changed in the 85 apartment complex. Furthermore, our specification expressly provides and the page is initialled by your client the right to substitute products.
[24]On Tuesday, 3 May 2016, Zane Kennedy wrote to Mike Mahoney saying:
What about the other matters on the attached quote? Other than the wine rack of course. I presume Affin can also attend to these as previously advised?
[25]On 16 May 2016, Zane Kennedy wrote again to Mike Mahoney:
Mike – No response from you to my email below. If you won't engage, you leave the Vissers with no choice but to formally escalate the matter in order to receive what they contracted and paid for. In that event, these email communications will be relevant to the issue of costs.
[26]On 25 May 2016, Zane Kennedy wrote again to Mike Mahoney:
Given your refusal to respond to my last emails, I will proceed on the basis that you have no objection to the Vissers instructing Affin Group to carry out the work in their quote which you have previously agreed to pay for in the emails referenced.
[27] On 25 May 2016, Mike Mahoney replied to Zane Kennedy, copying Dave Mahoney:
We previously approved an instruction to Affin subject to approving the specification on each item prior to confirmation.
[28]On 5 August 2016, Zane Kennedy wrote to Mike Mahoney:
Further to your confirmation on 25 May 2016 that you have already approved the instruction to Affin, a deposit of 50 per cent is now payable to secure the cabinetry and other fit-out in accordance with the attached quote on the agreed specifications (as previously provided to you).
The Vissers are prepared to meet the cost of the wine rack themselves reducing the total cost for $41,092.87. Can you now make payment of this sum to Affin and confirm when that has occurred?
I understand that this needs to be paid within the next five days to avoid additional costs and delay.
[29]On 6 September 2016, Zane Kennedy wrote again to Mike Mahoney:
Mike, I refer to the email below and record your failure to respond to it.
The Vissers have instructed Affin to proceed and will be looking to recover the cost and interest from Tawera upon completion.
[30]Thereafter the Vissers proceeded to do the work themselves.
Analysis
[31] I agree with the Judge that a robust approach can be taken on a summary judgment application, but even taking such an approach, I consider there is an arguable defence that the documents do not establish that a binding agreement was reached. It is not clear what work was agreed, and in particular, the scope and specifications of it.
[32] The first of the key documents on which Mr Spring relies is the email of 18 December 2015 from Mike Mahoney. This is no more than an acknowledgement they are liable for remedial work in principle. The question was, what remedial work? Mr Mahoney’s 18 December 2015 email provided no indication of that and it was clear from the very language of that email that there were still “game plans” and “issues” to be discussed. Mr Mahoney refers to items mentioned being minor items. While he says they are minor in the overall project, it would be doubtful that he would have in mind at that point costs that were not too far off the total cost of the variations in the first place. In any event, there is clearly no agreement recorded as to liability for the actual works subsequently effected by the Vissers.
[33] The second key email, being Mr Mahoney’s email of 22 February 2016, also does not demonstrate the parties have reached agreement regarding the remedial works as subsequently effected. It begins with “there are several ambiguities”. Several items are agreed to, but in general terms, with no specification agreed. The other items are obviously either still under discussion, not agreed, or Summit has agreed to sort them. I agree with Mr Spring that it is presumably 15 Hopetoun’s obligation to attend to remedial works, not Summit’s, but Mr Mahoney saying that the contractor has agreed to sort something, does not make 15 Hopetoun liable for it. The Vissers would have to respond by obtaining confirmation from 15 Hopetoun that it was nonetheless accepting liability itself, if Summit did not attend to it. The end of that email makes it clear more formality is required. I note Mr Spring accepts in any event that there is no agreement until the third of the emails he relies upon.
[34] The general tone of the 22 February 2016 email is not consistent with any final agreement, with comments as noted such as “several ambiguities to your side of events”. The 22 April 2016 email from 15 Hopetoun makes it clear the parties are not yet in agreement.
[35] I now turn to the third key document, being Mr Mahoney’s email to Zane Kennedy dated 25 May 2016. Mr Spring says that this was when the agreement was actually formed, in other words he accepts that there was no actual agreement prior to that time, which I consider must be correct.
[36] I cannot say that this email, even read in conjunction with all of the earlier correspondence, amounts to a clear agreement to be liable for specific remedial works. What is meant by the “instruction” to Affin is unclear. More importantly, the instruction was clearly subject to approving the specification on each item prior to confirmation. Not only was approval required, but so was confirmation. Mr Spring acknowledged that these words following the instruction for Affin were problematic, but said they should be ignored. I do not consider that is right and in any event, the language overall is too ambiguous to be able to say with sufficient certainty that agreement had been reached and precisely what that agreement was.
[37] In terms of the specifications, Mr Spring said that the specifications were already set out in the Affin quote, but Mr Mahoney had the Affin quote and was saying that their instruction was subject to approving the specification on each item prior to confirmation so he would appear to have been referring to something either other than, or in addition to what was in the quote.
[38] The parties have given conflicting evidence as to the specifications for the remedial items. Disputes as to fact, particularly over something such as building specifications are not appropriately resolved in a summary judgment.
[39] Mr Spring refers to a number of factors separate from the correspondence, which relate to credibility, but do not remove the arguable defence over the agreement.
[40] The Judge (and Mr Spring) clearly placed significant weight on the fact that Mr Mahoney should have protested the continued demands from Mr Visser and his solicitors for 15 Hopetoun to honour its obligations. I agree it is odd that he did not, but I cannot put it any higher than that. I do not consider that factor alone could remove uncertainty around the correspondence, or elevate the correspondence alone to a binding agreement. It is equally the case that Mr Visser was ignoring Mr Mahoney’s stipulation that 15 Hopetoun approve specifications before confirmation. Mr Mahoney made a similar point regarding the need for more detail and sign-off at the end of his 22 February 2016 email. Mr Visser was following his own course.
Conclusion
[41]I am not satisfied that there is no arguable defence.
[42]The order for summary judgment is set aside.
[43] The proceedings are remitted to the District Court for case management purposes.
[44]Costs are reserved.
[45] As I said at the conclusion of the hearing, it seems inevitable that some amount will be payable by 15 Hopetoun to Mr Visser, in which case there will also be costs ramifications. The amount involved in this dispute is modest. The parties should resolve it.
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Hinton J
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