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Gedye v South

Gedye v South

Case [2010] NZCA 207 20 May 2010

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IN THE COURT OF APPEAL OF NEW ZEALAND
CA567/2009
[2010] NZCA 207
BETWEENNATHAN STANLEY GEDYE
Appellant

ANDCOLIN ROBERT SOUTH, DIANA LEE SOUTH AND RICHARD JAMES BURRELL (AS TRUSTEES OF THE SOUTH FAMILY TRUST)
Respondents

Hearing:17 March 2010

Court:Arnold, Panckhurst and Harrison JJ
Counsel:J A MacGillivray for Appellant
M H Benvie for Respondents

Judgment:20 May 2010 at 2.30 pm

JUDGMENT OF THE COURT

AThe appeal against refusal of summary judgment is dismissed.
BThe appellant must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________
REASONS OF THE COURT
(Given by Panckhurst J)
The context
[1]       Mr and Mrs Gedye owned a residential property in Auckland. In 1997 they commissioned work on the property for which a permit or building consent was required. In 2003 the Gedyes sold the property to the respondents who are the trustees of the South Family Trust.
[2]       By a standard clause in the agreement for sale and purchase (the agreement) the Gedyes warranted that any works undertaken on the property which required a permit or building consent were performed in full compliance with all obligations imposed under the Building Act 1991 (then in force).
[3]       In 2006 the trustees sold the property after making disclosure to the purchasers of defects and water ingress issues which affected the house. In the result the trustees claim that the sale was for a figure $520,000 less than would have been the case had the house been in sound condition.
[4]       In August 2008 the trustees brought this proceeding in which they allege that the Gedyes were in breach of the warranty contained in the agreement because the building work undertaken in 1997 was not performed in compliance with the Building Act. On account of the ten years which had elapsed since completion of the work the Gedyes applied for summary judgment against the plaintiff trustees in reliance on the longstop provision in s 91(2) of the Building Act.
[5]       Associate Judge Sargisson declined the application for summary judgment. Mr Gedye appeals against that decision.
Some further background
[6]       The above is a sufficient outline of the facts for the purposes of the s 91(2) argument. However, a factual curiosity exists which should also be mentioned. Through oversight, the Auckland City Council did not issue a code compliance certificate following completion of the works in 1997. The omission was only discovered in 2003 when, following an inspection, a certificate was issued.
[7]       Accordingly, the proceeding is against the Auckland City Council as first defendant and against Mr and Mrs Gedye as second defendants (albeit the present appeal was brought in Mr Gedye’s name alone). The Council is likewise sued for the alleged $520,000 diminution in the sale price, together with general damages of $20,000 for distress and inconvenience. The claim against the Council is based in negligence, it being said that the house inspection was inadequate with the result that a…

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 Gedye v South

Details

AGLC: Gedye v South [2010] NZCA 207
Case: [2010] NZCA 207
Decision Date: 20 May 2010

CaseChat Overview and Summary

In Gedye v South, Mr. and Mrs. Gedye appealed against the refusal of summary judgment in a claim brought by the trustees of the South Family Trust alleging that the Gedyes breached a warranty in the agreement for sale and purchase of their residential property. The warranty pertained to building work that had been performed in 1997, which the Gedyes warranted complied with the Building Act. The trustees claimed that the building work was defective and that the Gedyes were in breach of the warranty. The Gedyes applied for summary judgment against the trustees, relying on the ten-year longstop provision in s 91(2) of the Building Act. Associate Judge Sargisson declined the application for summary judgment, and Mr. Gedye appealed against that decision. The essential issue was whether the ten-year longstop limitation period applied to the proceeding, and if so, whether the act or omission on which the proceeding was based was the building work itself or the giving of the contractual warranty. The Court held that the longstop provision did not apply to this proceeding, as the relevant act or omission was the giving of the contractual warranty, rather than the building work itself. The Court agreed with the analysis in Klinac that the ten-year longstop limitation period commenced to run at the moment the warranty was given, and the parties knew that the term of the contract was enforceable throughout a six-year period. The Court also held that the purpose of s 91(2) was to avoid the litigation of stale factual disputes, and that in this case, the limitation period, and the longstop period, commenced to run at the same point in time. The appeal against refusal of summary judgment was dismissed, and the appellant must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

Orders