Davis v SM Build 2017 Limited - [2024] NZHC 423

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-028

[2024] NZHC 423

UNDER the Law of Contract

IN THE MATTER

of an alleged breach of contract and negligence

BETWEEN

CHRISTOPHER RAYMOND DAVIS and

LAURA CATHERINE DAVIS as trustees of THE DAVIS FAMILY TRUST

Plaintiffs

AND

SM BUILD 2017 LIMITED

First Defendant

SEAN LOGAN McINROE
Second Defendant

CORBETT CONSULTING LIMITED
Third Defendant

CHRISTCHURCH CITY COUNCIL

Fourth Defendant

Hearing: 16 February 2024

Appearances:

M J McKay for Plaintiffs

K R Narayanan J J Retter for First and Second Defendants (by VMR)

WJ Hamilton for Third Defendant No appearance for Fourth Defendant

Judgment:

1 March 2024

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 1 March 2024 at 4.30pm
pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

DAVIS v SM BUILD 2017 LIMITED [2024] NZHC 423 [1 March 2024]

[1] The plaintiffs own a property at Westmorland, Christchurch (the property). They entered into a written contract with the first defendant, SM Build 2017 Ltd (SM Build), in or around December 2020 to build a house on the property. Problems arose with the build which led to the plaintiffs cancelling the contract. They have brought this proceeding against the defendants who had involvement in the project seeking damages. They plead breach of contract and negligence against the first to third defendants, and breach of statutory duty and negligence against the fourth defendant.

[2] The proceeding has been on foot since February 2022. In September 2023, the first and second defendants applied for a stay pending the making of a determination by the Chief Executive of the Ministry of Business, Innovation and Education (MBIE) under s 177 of the Building Act 2004 (the Act). This judgment deals with that application.

[3] The first and second defendants argue that, under s 182 of the Act, the Court should stay this proceeding until the determination by the Chief Executive has been made or refused. In addition, they say a stay should be granted because the determination will be beneficial to all the parties in resolving matters put in issue in the plaintiffs’ amended statement of claim, assist with expert engagement and also in the advancement of settlement discussions.

[4] The plaintiffs oppose the application. They argue that s 182 is not engaged and the granting of a stay will not be beneficial but will cause significant prejudice to them and unnecessary delay.

[5] The third and fourth defendants do not take a position in respect of the application.

The facts

[6] At an early stage of the contract the plaintiffs were concerned about SM Build’s workmanship and as time passed their concerns increased. On 14 December 2021, the Christchurch City Council (the Council) issued a notice to fix under ss 164 and 165 of the Act. The stated particulars of contravention and non-compliance were that the building work was not in accordance with the relevant building consent and was in

contravention…

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 Davis v SM Build 2017 Limited

Details

AGLC: Davis v SM Build 2017 Limited [2024] NZHC 423
Case: [2024] NZHC 423
Decision Date: 1 March 2024

CaseChat Overview and Summary

Davis v SM Build 2017 Limited [2024] NZHC 423 concerns a dispute arising from a building contract. The plaintiffs, Christopher and Laura Davis, entered into a contract with SM Build 2017 Limited to construct a house on their property in Westmorland, Christchurch. Issues arose with the quality of the construction, leading to the plaintiffs cancelling the contract and bringing this action against the defendants, seeking damages for breach of contract and negligence. The first and second defendants applied for a stay of the proceeding pending a determination by the Ministry of Business, Innovation and Employment (MBIE) under the Building Act 2004. The plaintiffs opposed the application, arguing that the stay would cause significant prejudice and unnecessary delay.

The court considered the legal issues regarding the applicability of section 182 of the Act, which prohibits commencing proceedings if the matter can be the subject of a determination. The first and second defendants argued that the proceeding should be stayed as it would be beneficial to resolve the issues in dispute and assist with expert engagement and settlement discussions. The plaintiffs contended that section 182 does not apply and that granting a stay would not be in the interests of justice.

The court concluded that section 182 does not mandate a stay of proceedings. The court found the matter giving rise to the proceeding was the alleged defective construction of the house in breach of contractual and tortious obligations, not non-compliance with the Building Code. The court rejected the argument that a stay would serve the interests of justice, noting the speculative benefits and real prejudice to the plaintiffs. The application for a stay was dismissed, and the plaintiffs were awarded costs. The court ordered a telephone case management conference to set a date for trial.

Orders