DHC Assets Limited v Arnerich - [2025] NZSC 120

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI O AOTEAROA

SC 44/2025
[2025] NZSC 120

BETWEEN	DHC ASSETS LIMITED Applicant
AND	ANTONY IVO ARNERICH Respondent

Court:	Glazebrook, Ellen France and Miller JJ
Counsel:	F J Thorp and L J Turner for Applicant R J Hollyman KC and J D McBride for Respondent
Judgment:	17 September 2025

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

B The applicant must pay the respondent costs of $2,500.
____________________________________________________________________

REASONS

Introduction

The applicant, DHC Assets Ltd (DHC), seeks leave to appeal to this Court in relation to one aspect of a judgment of the Court of Appeal; namely, whether DHC could recover time-related “Preliminary and General” (P&G) costs.[1]

Background

[1]Arnerich v DHC Assets Ltd [2025] NZCA 104 (Goddard, Brewer and Osborne JJ) [CA judgment].

The application for leave arises in the context of long-running litigation between the parties. The background is set out in detail in the judgment of the Court of Appeal.[2] For present purposes we need only note the following. DHC is a construction company. It was contracted to construct a commercial building for Mr Arnerich’s company, Vaco Investments (Lincoln Rd) Ltd (Vaco).
[2]At [1]–[146].
The construction contract between Vaco and DHC is described in the Court of Appeal judgment.[3] It consisted of seven contract documents including the contract performance agreement (CPA) and the general conditions of contract, NZS 3910:2003.[4] Clause 4.4 of the CPA, relied on by the Court of Appeal, provided that “[a]ll [P&G] costs and expenses relating to any changes shall be deemed included in the original Contract Price and therefore no further allowance will be made”. As we shall discuss, a different approach applied to some of the variations requested by ASB Bank Ltd (ASB), the intended principal tenant for the building.
[3]At [153]–[177].
[4]NZS 3910:2003 was a standard form of general contractual conditions for incorporation into construction contract documents, and was widely used in the construction industry.
Numerous variations over the course of construction delayed completion of the project, as a result of which DHC incurred time-related costs.
Vaco was placed into voluntary liquidation on 1 July 2014. DHC is an unpaid creditor of Vaco. DHC pursued claims for just over $1 million plus interest from Vaco. Ultimately, Vaco was unable to pay either the sum awarded to DHC in an adjudication under the Construction Contracts Act 2002, or further sums claimed by DHC.
DHC brought proceedings under s 301 of the Companies Act 1993 against Mr Arnerich, the respondent. DHC’s claim succeeded in part in the High Court.[5] Following a partially successful appeal by Mr Arnerich to the Court of Appeal, the matter was referred back to the High Court for a further hearing.[6] The High Court, following the further hearing, made an order requiring Mr Arnerich to pay DHC a sum of approximately $1.1 million.[7] That sum included time-related P&G costs. The Court of Appeal allowed Mr Arnerich’s appeal in relation to the High Court’s…

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 DHC Assets Limited v Arnerich

Details

AGLC: DHC Assets Limited v Arnerich [2025] NZSC 120
Case: [2025] NZSC 120
Decision Date: 17 September 2025

CaseChat Overview and Summary

DHC Assets Limited, a construction company, sought leave to appeal against the Court of Appeal's decision in relation to its recovery of time-related "Preliminary and General" (P&G) costs from Vaco Investments (Lincoln Rd) Ltd, the construction client, through its representative, Antony Ivo Arnerich. The appeal concerned the interpretation of the construction contract between DHC and Vaco, specifically the contract performance agreement (CPA) and general conditions of contract, NZS 3910:2003, which included a clause excluding certain P&G costs from recovery. The case arose from a long-running dispute over variations to the construction project that resulted in delays and additional costs for DHC. The High Court initially awarded DHC approximately $1.1 million, including time-related P&G costs, but the Court of Appeal overturned the award of these costs, a decision DHC now sought to appeal.

The legal issues before the Supreme Court centred on the interpretation of the CPA and the general conditions of contract, specifically Clause 4.4, which excluded certain P&G costs from recovery. DHC argued that the exclusion clause did not apply to variations requested by the intended principal tenant, ASB Bank Ltd, and that there was a conflict between this clause and other provisions of the contract. DHC also claimed that the Court of Appeal did not properly consider its arguments, resulting in a miscarriage of justice. The Court of Appeal had ruled that Clause 4.4 was clear and that DHC had chosen to include it in the contract, accepting the associated risks.

The Supreme Court found that the case was not an appropriate vehicle to consider the effectiveness of provisions requiring specified formalities for variations or modifications, as this argument had not been raised before the Court of Appeal or the High Court. Regarding the contractual interpretation issue, the Court of Appeal had considered Clause 4.4 and found it clear that certain P&G costs were not recoverable, despite being favourable to Vaco. The Court of Appeal had also allowed DHC's cross-appeal in part, finding that Mr Arnerich had agreed that DHC could claim P&G costs for variations requested by ASB. The Supreme Court concluded that there was no general or public importance or commercial significance in the issues raised, nor was there an appearance of a miscarriage of justice.

The Supreme Court dismissed the application for leave to appeal and ordered DHC to pay the respondent's costs of $2,500. The Court found that the Court of Appeal's assessment of the contractual arrangements and evidence was orthodox and did not require reconsideration by the Supreme Court.

Orders