Drnasin v Watson - [2024] NZHC 1503

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2023-419-340

[2024] NZHC 1503

BETWEEN TONY STEVEN DRNASIN and JULIE LOUISE DRNASIN
Plaintiffs

AND

BRUCE HENRY ROY WATSON and ALICE JOAN WATSON

Defendants

Hearing: 15 May 2024

Appearances:

Victoria Whitfield/Martin Meier for the Plaintiffs Matthew S King for the Defendants

Judgment:

10 June 2024

JUDGMENT OF ASSOCIATE JUDGE TAYLOR

[Interlocutory application for summary judgment as to liability]

This judgment was delivered by me on 10 June 2024 at 3:00pm
pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Solicitors:
Gurnell Harrison Stanley Lawyers, Hamilton Norris Ward McKinnon, Hamilton
Counsel:
Victoria Whitfield/Martin Meier, Barristers, Cambridge Matthew S King, Barrister, Tauranga

DRNASIN v WATSON [2024] NZHC 1503 [10 June 2024]

Introduction

[1] At the start of 2022, Tony and Julie Drnasin (the Drnasins) purchased a property in Mount Maunganui from Bruce and Alice Watson (the Watsons). By the end of 2022, it had transpired that in the Drnasins’ view, certain warranties and undertakings made by the Watsons at the time of sale and purchase had been breached.

[2] The Drnasins filed a statement of claim dated 30 November 2023 alleging breaches of vendor warranty. On that same day, they also filed an interlocutory application seeking summary judgment on liability. The Watsons oppose the application.

Background

[3] The Watsons were the registered proprietors of a property on Maunganui Road, Mount Maunganui. They subdivided the property and on 19 November 1993, three lots were created. Lot 1 was known as 32A Maunganui Road, with a Certificate of Title SA55D/298 and Deposited Plan 69563 (the Property). The Watsons continued to be the registered proprietors of the Property until January 2022.

[4] On or about 17 May 1993, an application for building consent was made for the construction of three residential Houses on 32 Maunganui Road. On or about 22 June 1993, a building consent was issued pursuant to s 35 of the Building Act 1991, including for the construction of a house on the Property (the House). The House was constructed between 1993 and 1994.

[5] By an agreement for sale and purchase dated 13 January 2022, the Drnasins purchased the Property from the Watsons unconditionally for a purchase price of
$3,100,000 (the Agreement). Settlement occurred on 4 April 2022. The Agreement included vendor warranties at cl 7.3 that:

(a)any building consent required by law was obtained (cl 7.3(5)(a));

(b)to the Watsons’ knowledge, the works were completed in compliance with that consent (cl 7.3(5)(b)); and

(c)where appropriate, a code compliance certificate (CCC) was issued for those works (cl 7.3(5)).

(the Vendor Warranties)

[6] The Drnasins allege that the Watsons breached the Vendor Warranties in the Agreement, with each breach causing them to have suffered losses. The estimated loss they claim to have suffered at the time of the statement of claim is in excess of
$350,000.

The Drnasins’ application for summary judgment

[7] The…

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 Drnasin v Watson

Details

AGLC: Drnasin v Watson [2024] NZHC 1503
Case: [2024] NZHC 1503
Decision Date: 10 June 2024

CaseChat Overview and Summary

The case of Drnasin v Watson involved a dispute between Tony and Julie Drnasin and Bruce and Alice Watson over alleged breaches of vendor warranties in the sale and purchase of a property. The Drnasins sought summary judgment on liability for the Watsons' breach of warranties, while the Watsons opposed this application on the basis of estoppel. The key legal issues centred around whether the Watsons could rely on estoppel to prevent the Drnasins from enforcing the warranties, given alleged misrepresentations and reliance on those misrepresentations.

The Court analysed the elements of estoppel, including whether there was a clear representation, reasonable reliance on that representation, detriment as a result of the reliance, and whether it would be unconscionable to allow the Drnasins to rely on the warranties. The Court found that there were conflicting accounts of events and that the circumstances of the case, including the signing of the agreement without legal advice, created a reasonably arguable basis for the Watsons' estoppel defence. The Court concluded that the Watsons had presented a tenable argument that they had reasonably relied on representations made by the Drnasins, and that it would be unconscionable for the Drnasins to enforce the warranties.

Accordingly, the Court dismissed the Drnasins' application for summary judgment on liability, finding that the Watsons had created a reasonably arguable basis for their estoppel defence. The Court ordered that the application for summary judgment was dismissed and that the parties would address the issue of costs in accordance with the usual rule.

Orders