Civic Lane Limited v Dibble - [2023] NZCA 582

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA361/2023
[2023] NZCA 582

BETWEEN	CIVIC LANE LIMITED Appellant
AND	JOHN ANDREW DIBBLE Respondent

Hearing:	25 September 2023
Court:	Gilbert, Peters and Hinton JJ
Counsel:	R D Butler for Appellant S E Wroe and T J M Ashley for Respondent
Judgment:	22 November 2023 at 9.30 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant must pay costs to the respondent for a standard appeal on a band A basis and usual disbursements.

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REASONS OF THE COURT

(Given by Gilbert)

This appeal concerns the proper interpretation of an agreement for sale and purchase of a new apartment to be constructed in an existing building. The central issue is the price payable for the completed apartment, in particular whether the costs of modifying the standard layout to suit the purchaser’s needs are included in the agreed price.

The facts

Civic Lane Ltd is the developer of an apartment project in the heritage-listed former Civic Administration Building in central Auckland (now known as The CAB). The apartments were architecturally designed and offered for sale off the plans through Bayleys Real Estate Ltd. Construction company, Naylor Love Ltd, was responsible for the renovation of the building and construction of the apartments and common spaces.
Mr Dibble and his wife have been living in Hong Kong for many years but plan to return to New Zealand to retire. When they were in Auckland in 2020, they met with Ms Suzie Paine from Bayleys and she introduced them to The CAB development. However, none of the standard apartments suited their needs because they were too small, and the sub-penthouse and penthouse apartments were too expensive. Ms Paine suggested that it might be possible to combine two standard apartments to create one bigger apartment. This idea appealed to the Dibbles.
On 19 October 2020, Ms Paine sent an email to Mr Dibble advising that it would be possible to combine two of the standard apartments (B and C) to suit their particular needs:
Attached is the sub-Penthouse floor plan, double click to expand. It appears that a BC combo plan hasn’t been done so we have a fabulous opportunity here to bespoke something for you.
Have a think about the 2 plans (both attached), and see if we can incorporate some features, ie the larger kitchen. The developer is happy to make the bathroom redesign with a bath and double vanity.
It transpired that this option was not available on the higher floors and the Dibbles preferred to be as high up in the 22-storey building as possible. However, a combination of apartments C and D (80 m² and 71 m²respectively) on the 16th floor was available and the Dibbles were keen to pursue this. On 15 December 2020, Mr Dibble advised Ms Paine by email of his intention to make an offer of $2.9 million for apartment 16 C/D, but stating:
It is key that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Civic Lane Limited v Dibble

Details

AGLC: Civic Lane Limited v Dibble [2023] NZCA 582
Case: [2023] NZCA 582
Decision Date: 22 November 2023 at 9.30 am

CaseChat Overview and Summary

Civic Lane Limited has appealed against the decision of Associate Judge Brittain, who granted Mr Dibble's application for specific performance of the contract for sale and purchase of an apartment. The central issue is the interpretation of the vendor warranty in the agreement, specifically whether the developer can charge the purchaser for the costs associated with modifying the standard layout to create a bespoke apartment. The Court of Appeal found that any costs associated with the new layout were included in the purchase price, and dismissed the appeal. The Court held that the developer had assumed the commercial risk and associated cost of constructing a single apartment instead of two smaller apartments, and any adjustment to the price had to be with Mr Dibble's agreement. The developer was not entitled to claim for the Naylor Love variations or the $80,000 for project management costs because Mr Dibble had not agreed to pay extra for these works. The Court concluded that the developer's costs associated with the new floor plan and layout of the new apartment were not recoverable, and the developer carried the risk that Mr Dibble might not agree to a price adjustment if it was not stipulated at the time of the request. The Court ordered that the appellant must pay costs to the respondent for a standard appeal on a band A basis and usual disbursements.

Orders