2 Harrogate Street Limited v Lister

[2011] NZCA 182

IN THE COURT OF APPEAL OF NEW ZEALAND

CA766/2010
[2011] NZCA 182

BETWEEN  2 HARROGATE STREET LIMITED
Applicant

AND  ANDREW ROSS LISTER AND ANOR AS TRUSTEES OF THE LISTER TRUST
First Respondent

AND  P M FOLEY
Second Respondent

AND  FOLEY DESIGN LIMITED
Third Respondent

AND  PAYNTER INVESTMENTS LIMITED
Fourth Respondent

AND  OWEN BRENT ENNOR
Fifth Respondent

Hearing:         20 April 2011

Court:             Glazebrook, Arnold and Wild JJ

Counsel:         O G Paulsen for Applicant
D G Smith for First Respondent
No appearance for Second Respondent
No appearance for Third Respondent
No appearance for Fourth Respondent
No appearance for Fifth Respondent

Judgment:      13 May 2011 at 2.30 pm

JUDGMENT OF THE COURT

A        The application for special leave is declined.

BThe applicant must pay the first respondent costs for a standard application on a band A basis and usual disbursements.

REASONS OF THE COURT
(Given by Glazebrook J)

Introduction

1. On 7 May 2002 Mr Lister “or nominee” entered into an agreement to purchase from 2 Harrogate Street Ltd (Harrogate) a purpose built motel known as the Drifters Inn at Hanmer.  Harrogate had built the motel in 1997.  Mr Lister nominated the trustees of the Lister Trust (the trustees) to take title. 

2. Following settlement in June 2002 the motel was found to leak.  The trustees sued Harrogate, pleading two causes of action: the first in contract for alleged breach of standard contractual warranties and the second in tort for negligence.

3. On 12 November 2009 Associate Judge Faire refused Harrogate’s application to strike out the trustees’ statement of claim.[1]  That decision was upheld on review by French J on 14 July 2010.[2]  Leave to appeal to this Court was refused on 2 November 2010 by French J.[3]

   [1]      Lister v 2 Harrogate Street Ltd HC Christchurch CIV-2008-409-1071, 12 November 2009.

   [2]      Lister v 2 Harrogate Street Ltd HC Christchurch CIV-2008-409-1071, 14 July 2010.

   [3]      Lister v 2 Harrogate Street Ltd HC Christchurch CIV-2008-409-1071, 2 November 2010.

4. Harrogate now seeks special leave to appeal against French J’s decision on review.[4]

Grounds of application

[4]      Judicature Act 1908, s 26P(1AA).

1. The application is made on the basis that this Court should revisit its decision in Laidlaw v Parsonage[5] with regard to purchasers’ nominees under agreements for the sale and purchase of land.

   [5]      Laidlaw v Parsonage [2009] NZCA 291, [2010] 1 NZLR 286.

2. The second question is whether a developer/builder of a non-residential building owes a duty of care in tort to an immediate or subsequent owner to ensure proper care and skill is exercised in the construction of the building.

French J’s leave decision

1. French J refused Harrogate leave to appeal.  On the nomination issue she considered it should be up to this Court to decide whether to grant leave to reconsider one of its own decisions.[6] 

   [6]      Lister v 2 Harrogate Street Ltd HC Christchurch CIV-2008-409-1071, 2 November 2010 at [22].

2. On the duty of care issue she accepted that this is a matter of public importance that satisfied the test for granting leave to appeal.  She did not grant leave however, because this was a “fall back claim” that would only be pursued if the trustees failed to uphold Laidlaw.  She also noted that the tort claim was unlikely to add significantly to the length of the hearing and to cost.[7]

Our assessment

[7] At [23].

1. This Court is not in a position to revisit our decision in Laidlaw.  Apart from it being a recent decision of this Court, leave to appeal against that decision was refused by the Supreme Court.[8]  In refusing leave the Supreme Court said:

   [1]  The single point on this proposed appeal is whether the Court of Appeal correctly concluded that the description of a purchaser in an agreement for sale and purchase as “X and/or nominee” is sufficient to bring the nominee within s 4 of the Contracts (Privity) Act 1982 with the consequence that the nominee can enforce the contract under s 8 of that Act.  We are declining leave because the proposed argument for the applicant has no prospect of succeeding.  The reasoning of the Court of Appeal is entirely convincing.  We agree with that Court that statements to the contrary in the first of the cases under the Act to reach the Court of Appeal, Field v Fitton, are wrong.  That has been the view almost unanimously taken in subsequent cases both at High Court and Court of Appeal level and such criticisms as have been made of it are unconvincing (emphasis added)…

   [4]  The law on this point in New Zealand has been satisfactorily settled by the decision below (emphasis added).

   [8]Laidlaw v Parsonage [2009] NZSC 98, [2010] 1 NZLR 286 per Elias CJ, Blanchard and McGrath JJ.

2. It may be that not all decisions to refuse leave would leave this Court unable to revisit a decision if grounds exist to do so.  However, a decision of the Supreme Court in a leave application which declares that the reasoning of this Court is “entirely convincing” and that the law must be treated as settled must be binding on this Court.  Given the terms in which the Supreme Court declined leave in Laidlaw, we do not consider special leave should be granted with regard to this question.

3. As to the second ground, like French J, we do not consider this appropriate for special leave for the reasons she gave.  It may also be more appropriate that this question be considered against its full factual matrix, which will only be possible after trial.

Result

1. The application for special leave is declined.

2. The applicant must pay the first respondent costs for a standard application on a band A basis and usual disbursements.

Solicitors:
Cavell Leitch Pringle & Boyle, Christchurch for Applicant
Benton Law, Auckland for First Respondent