JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellants must pay the respondents costs in this Court for a standard appeal on a band A basis, plus usual disbursements.

REASONS OF THE COURT
(Given by Ellen France J)
Table of Contents
PARA NO
Introduction  [1]
Factual background   [7]
THE CONTRACTS (PRIVITY) ACT 1982  [14]
THE DECISION OF THE ASSOCIATE JUDGE  [17]
Were the trustees entitled to the benefit of the agreement?  [21]
Did the trustees prove they had suffered the loss?  [49]
Conclusion  [54]
Introduction
[1]   In October 2003 the appellants, John Laidlaw and Carol Laidlaw, agreed to sell a residential property in Gulf Harbour, Auckland to Geoffrey Parsonage “and-or nominee”. The respondents, Geoffrey Parsonage and Timothy Goulding as trustees of a family trust (the Seelye Trust), became the nominee under the agreement for sale and purchase. The property was duly transferred to the respondents as trustees.
[2]   After Mr Parsonage moved into the house he discovered that it leaked. Mr Parsonage and Mr Goulding (“the trustees”) sued the appellants (“the Laidlaws”) in contract and in tort to recover the cost of remedying defects causing the leak and other losses. The trustees sought summary judgment in respect of the contractual causes of action. The contractual claims were based on a warranty in the agreement for sale and purchase that the building was completed in accordance with building consents and obligations under the Building Act 1991.
[3]   In a judgment now reported as Parsonage v Laidlaw (2008) 6 NZConvC 194,638 (HC) Associate Judge Abbott granted summary judgment. The Laidlaws appeal against that decision.
[4]   The appeal raises two issues. The first issue is whether the trustees were entitled to the benefit of the agreement for sale and purchase. This relates to the Associate Judge’s conclusion that s 4 of the Contracts (Privity) Act 1982 (“the Act”) applied. Section 4 provides, generally, that where a promise in a contract confers a benefit on a sufficiently designated person who is not a party to the contract, the promisor is under an obligation to that person to perform the promise. The effect of the Associate Judge’s decision was that the trustees as nominee could take the benefit of the warranty in the agreement for sale and purchase. The Laidlaws say that the requirements of s 4 are not met.
[5]   The second issue is whether the trustees (as opposed to Mr Parsonage) incurred any loss. This issue arises because the Associate Judge concluded that the trustees had proven on the balance of probabilities that they had paid the costs of the repair…

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 Laidlaw v Parsonage

Details

AGLC: Laidlaw v Parsonage [2009] NZCA 291
Case: [2009] NZCA 291
Decision Date: 9 July 2009

CaseChat Overview and Summary

The appeal was brought by John Carr Laidlaw and Carol Anne Laidlaw against Geoffrey Francis Parsonage and Timothy John Goulding as trustees of the Seelye Trust. The Laidlaws had sold a residential property in Gulf Harbour, Auckland to Parsonage “and-or nominee” and the trustees became the nominee under the agreement for sale and purchase. Parsonage and Goulding, as trustees, sued the Laidlaws in contract and in tort to recover the cost of remedying defects causing a leak in the property and other losses. The trustees sought summary judgment in respect of the contractual causes of action based on a warranty in the agreement for sale and purchase that the building was completed in accordance with building consents and obligations under the Building Act 1991. The Court of Appeal considered two issues. The first was whether the trustees were entitled to the benefit of the agreement. The Laidlaws argued that the requirements of s 4 of the Contracts (Privity) Act 1982 were not met. The second issue was whether the trustees had proved they had suffered the loss. The Laidlaws argued that the trustees had not proved that they had suffered the loss. The Court of Appeal dismissed the appeal and found in favour of the trustees. The Court held that the trustees were entitled to the benefit of the agreement and that they had proved they had suffered the loss. The Laidlaws were ordered to pay the respondents' costs for the appeal on a band A basis, plus usual disbursements.

Orders