Craig Duthie v Denise Michelle Roose

IN THE SUPREME COURT OF NEW ZEALAND

SC 10/2017
[2017] NZSC 57

BETWEEN

CRAIG DUTHIE AND KIRSTEN TAYLOR-RUITERMAN
First Applicant

DRK CHARTERED ACCOUNTANTS LIMITED
Second Applicant

AND

DENISE MICHELLE ROOSE
First Respondent

DENISE DEVELOPMENTS LIMITED
Second Respondent

DMR DEVELOPMENT LIMITED
Third Respondent

Court:	William Young, OʼRegan and Ellen France JJ
Counsel:	G D Pearson and J K Scragg for Applicants K J Crossland and J S Langston for Respondents
Judgment:	2 May 2017

JUDGMENT OF THE COURT

A The application for leave to appeal is granted (Roose v Duthie [2016] NZCA 600).

BThe approved question is whether the Court of Appeal was right to find that the cause of action in tort accrued when the agreement for sale and purchase between Denise Developments Ltd and DMR Development Ltd was settled rather than when the agreement became unconditional.

____________________________________________________________________

REASONS

One of the issues raised in this appeal is whether the approach in Mills v Commissioner of Inland Revenue[1] or that in Gasparin v Commissioner of Taxation[2] is correct as to the timing of derivation of income in relation to a land transaction.
[1]Mills v Commissioner of Inland Revenue (1985) 7 NZTC 5,025 (HC).
[2]Gasparin v Commissioner of Taxation (1994) 50 FCR 73.
We consider that we may be assisted by submissions from the Crown on this aspect, given the tax implications of the point at issue, and invite the Attorney‑General to intervene if he wishes to do so. Accordingly, we direct the Registrar to bring the appeal to the attention of the Solicitor-General and to provide her with a copy of this judgment.

Solicitors:
Duncan Cotterill, Wellington for Applicants
Shieff Angland, Auckland for Respondents

CaseChat Overview and Summary

In the Supreme Court of New Zealand, the case of Craig Duthie and Kirsten Taylor-Ruiterman, represented by Drk Chartered Accountants Limited, against Denise Michelle Roose, Denise Developments Limited, and DMR Development Limited, was heard. The applicants sought leave to appeal against the Court of Appeal's decision in Roose v Duthie, which was concerned with the timing of the accrual of a cause of action in tort regarding a land transaction. The approved question for the Supreme Court was to determine whether the Court of Appeal was correct in finding that the cause of action accrued when the agreement for sale and purchase was settled, rather than when the agreement became unconditional.

The legal issues at the heart of this appeal involved the interpretation of when a cause of action in tort accrues in the context of a land transaction, specifically whether it is when the agreement for sale and purchase is settled or when the agreement becomes unconditional. This question also touched upon the timing of the derivation of income in relation to such transactions, with references made to previous cases such as Mills v Commissioner of Inland Revenue and Gasparin v Commissioner of Taxation. The court considered it prudent to seek submissions from the Crown due to the tax implications of the issue at hand and directed the Registrar to notify the Solicitor-General of the appeal.

The Supreme Court granted the application for leave to appeal and directed that the appeal would be heard with the approved question in mind. The court highlighted the importance of the tax implications and the need for potentially broader implications to be considered by the Crown. The decision underscored the court's intention to thoroughly examine the timing of accrual of causes of action in tort and the derivation of income in land transactions, ensuring a comprehensive understanding of the legal principles involved.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established