Hsieh v Dreamhome Construction Group Ltd - [2025] NZHC 1643

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-004-285

[2025] NZHC 1643

IN THE MATTER OF a breach of contract

BETWEEN

HSIN-TSE HSIEH, CHEN-YIN YANG HSIEH, and CHD TRUSTEES No. 16

LIMITED as Trustees of the HSIEH FAMILY TRUST

Plaintiffs

AND

DREAMHOME CONSTRUCTION GROUP LIMITED

First Defendant

CHENGFAN SUN
Second Defendant

BROTHERS ALUMINIUM LIMITED
First Third Party

C&Y NZ LIMITED
Second Third Party

(Continued Overleaf)

Hearing: 28 – 30 April, 1 – 2 and 5 May 2025

Appearances:

E St John and S P Maloney for the Plaintiffs D T Broadmore and E Lee for the Defendants

Judgment:

19 June 2025

JUDGMENT OF GARDINER J

This judgment was delivered by me on 19 June 2025 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

HSIEH v DREAMHOME CONSTRUCTION GROUP LTD [2025] NZHC 1643 [19 June 2025]

DOORWAYS (2009) LIMITED (DISCONTINUED)
Third Third Party

QUALITY KITCHEN NZ LIMITED
Fourth Third Party

TANK (LAST NAME UNKNOWN)
Fifth Third Party

Introduction

[1] The plaintiffs are trustees of a family trust (the trustees) wh o engaged the first defendant (Dreamhome), a building company, to construct two residential houses on their property at 40 Venus Place, Auckland. The second defendant (Mr Sun) is the sole director and shareholder of the first defendant. The parties entered into separate contracts for the two dwellings (together, the Contracts).

[2] The build did not go smoothly. Eventually, the trustees cancelled the contracts with Dreamhome on the grounds of delay and defective work. The trustees engaged another building company to complete the houses. The trustees now claim damages from Dreamhome for the difference between the amount it paid the new contractor and what they would have paid Dreamhome. The trustees also claim delay costs. Furthermore, the trustees complain that Dreamhome has not delivered up construction documents that will be required to obtain code compliance certificates for the work. The trustees claim compensation for the final cost of obtaining code compliance certificates. It seeks a separate trial on this point because its losses have not yet crystallised.

[3] Dreamhome says that the trustees were not entitled to terminate the contracts for delay or defective work.

[4] Dreamhome counterclaims for unpaid sums and damages for lost profit on the grounds that the trustees were not entitled to cancel the contracts. Alternatively, it seeks to set off the unpaid sums.

[5]Consequently, the issues to determine are:

(a)Were the trustees entitled to cancel the contract(s) for delay?

(b)Were the trustees entitled to cancel the contract(s) because the works were defective?

(c)If the trustees were entitled to cancel, what damages are payable to the trustees?

(d)If the trustees were not entitled to cancel, what damages are payable to Dreamhome?

(e)Did Mr Sun owe the trustees a duty of care? If so, what was the scope of the duty of care and did Mr Sun fail to discharge his duty?

(f)If Mr Sun breached…

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.

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Details

Case: [2025] NZHC 1643
Decision Date: 19 June 2025

CaseChat Overview and Summary

The plaintiffs, Hsin-Tse Hsieh, Chen-Yin Yang Hsieh, and CHD Trustees No. 16 Limited, commenced proceedings against Dreamhome Construction Group Limited (Dreamhome) for breach of contract in relation to the construction of two residential houses. The plaintiffs claimed damages for the difference between the amount they paid another contractor and what they would have paid Dreamhome. They also claimed delay costs and compensation for the final cost of obtaining code compliance certificates. Dreamhome counterclaimed for unpaid sums and damages for lost profit, arguing that the plaintiffs were not entitled to cancel the contracts. The central issues were whether the plaintiffs were entitled to cancel the contracts for delay or defective work and, if so, what damages were payable.

The court held that the plaintiffs were entitled to cancel the contracts for delay but not for defective work. Dreamhome unreasonably failed to perform the building works diligently and unreasonably delayed, which justified the cancellation. The court found that Dreamhome was not entitled to an extension of time for delays caused by unforeseen physical conditions and the plaintiffs’ actions. The court also held that Dreamhome was not liable for defective work because it had not made it clear that it did not intend to rectify the defects. However, the court found that Dreamhome was liable for missing construction documents, but the plaintiffs had not proven any loss or projected loss arising out of the missing warranties.

The court awarded damages of $308,286.13 to the plaintiffs, which was to be set off against the sum owed to Dreamhome. After the set-off, the plaintiffs were to receive $193,223.92. The court refused the application for a split trial, noting that the plaintiffs had ample opportunity to quantify their loss. The court also found that Mr Sun, the director of Dreamhome, was not liable in tort as he did not owe the plaintiffs a duty of care to complete the building works by the contractually agreed practical completion date.

Orders