Drive NZ Classic Limited v Low Volume Technical Association Inc

[2021] NZHC 377

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1250

[2021] NZHC 377

BETWEEN

DRIVE NZ CLASSIC LIMITED

Plaintiff

AND

LOW VOLUME VEHICLE TECHNICAL ASSOCIATION INC

First Defendant

NEW ZEALAND TRANSPORT AGENCY

Second Defendant

Hearing:

On the papers

Counsel:

K I Bond for Plaintiff

R J Gordon and A M B Leggat for First Defendant
K C Francis and B J Thompson for Second Defendant

Judgment:

4 March 2021

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 4 March 2021 at 2 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: ...................................

Solicitors:           Braun Bond & Lomas Ltd, Hamilton

MinterEllisonRuddWatts, Wellington Meredith Connell, Auckland

DRIVE NZ CLASSIC LTD v LOW VOLUME VEHICLE TECHNICAL ASSOCIATION INC [2021] NZHC 377 [4 March 2021]

Introduction

[1]                  On 13 November 2020, I dismissed applications by the first and second defendants (“LVVTA” and “NZTA” respectively and together “the defendants”) for an order striking out the plaintiff’s (“DNZC”) statement of claim.1

[2]                  By applications dated 15 December 2020, the defendants seek leave to appeal my judgment.2 DNZC does not oppose the applications. Having considered counsel’s submissions of 3 and 18 February 2021, I propose to grant leave for the reasons set out below.

Background

[3]                  DNZC’s claim alleges LVVTA and NZTA owed a duty of care to another company, “UDM”, to establish and administer the regime by which “low volume” vehicles are inspected and certified in a “reasonably competent manner and to a prudent standard”. DNZC alleges both defendants breached the alleged duty in numerous respects in a period between 2013 and 2015, causing UDM losses of more than $5 million.

[4]                  On 24 June 2019, UDM assigned its interest in any cause of action to DNZC, in circumstances referred to in my judgment.

[5]NZTA has filed a statement of defence. LVVTA has not done so as yet.

[6]                  The defendants brought their applications to strike out on the basis that UDM’s assignment to DNZC was an impermissible assignment of a bare cause of action, and thus void in the absence of DNZC establishing a genuine commercial interest in the enforcement of UDM’s claim.

[7]                  I was not satisfied DNZC had an insufficient interest to support the assignment and declined to strike out the claim on that ground.

1      Drive NZ Classic Ltd v Low Volume Vehicle Technical Association Inc [2020] NZHC 3015.

2      Senior Courts Act 2016, s 56(3).

[8]                  The second ground on which the defendants applied to strike out was that there was no prospect of DNZC establishing the defendants owed a duty of care to UDM not to cause the loss alleged.

[9]                  The parties referred me to various authorities in their submissions. The defendants referred me particularly to Attorney-General v Carter in  which  the  High Court, upheld by the Court of Appeal, granted an application to strike out the plaintiffs’ claim on the ground neither of the defendants in that case, one of which was the Attorney-General on behalf of the Ministry of Transport, could owe the plaintiffs a duty of care in respect of certificates of survey issued for a vessel the plaintiffs later purchased.3

[10]              DNZC referred to other authorities, such as Oceania Aviation Ltd v Director of Civil Aviation and Welton v North Cornwall District Council, in which the Court found duties of care or determined that such might be owed.4

[11]              Ultimately, I was not persuaded that DNZC’s claim was “hopeless” in the sense referred to in MSC Consulting Group Ltd v Oyster Management Ltd and, again, declined to strike out.5

[12]              The applications for leave to appeal are made on the ground I erred as a matter of law in declining to strike out on the grounds to which I referred.

[13]              This case plainly meets the high threshold required for an application for leave to appeal an interlocutory decision. The defendants have identified alleged errors of law of general or public importance warranting determination. Alternatively, the issues are otherwise of sufficient importance to them to outweigh the lack of general or precedential value. Clearly, if the defendants succeed on appeal, DNZC’s case cannot continue and there would be a very substantial saving in costs to all concerned. The case will require considerable evidence, and if the legal barriers to DNZC’s claims are insurmountable, the sooner that is known the better.

3      Attorney-General v Carter [2003] 2 NZLR 160 (CA).

4      Oceania Aviation Ltd v Director of Civil Aviation CA163/00, 13 March 2001; Welton v North Cornwall District Council [1997] 1 WLR 570 (CA).

5      MSC Consulting Group Ltd v Oyster Management Ltd [2020] NZCA 417 at [23].

Result

[14]I grant leave to appeal accordingly.

[15]              I decline LVVTA’s application for costs on its application for leave to appeal. Such an application is always required, given s 56 Senior Courts Act 2016. DNZC has not opposed the application, so as to increase the inevitable costs. Costs are to lie where they fall.

Peters J