Lockie v North Shore City Council HC Auckland CIV 2007-404-6546
[2011] NZHC 701
•6 July 2011
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2007-404-6546
BETWEEN BRYAN ALLAN LOCKIE, PATRICIA JOAN LOCKIE AND MILES ANTHONY AGMEN-SMITH AS TRUSTEES OF THE LOCKIE FAMILY TRUST
First Plaintiffs
ANDBRYAN ALLAN LOCKIE AND PATRICIA JOAN LOCKIE Second Plaintiffs
ANDNORTH SHORE CITY COUNCIL First Defendant
ANDCORNELIS GERARDUS FRANCISCUS BROOS
Second Defendant
ANDKELVIN LEONARD WALLS Third Defendant
Hearing: 23 June 2011
Counsel: GB Lewis and E Rutherford for plaintiffs
E Telle for third defendant
Judgment: 6 July 2011 at 9:30 AM
JUDGMENT OF ASSOCIATE JUDGE FAIRE
[on applications to strike out and for summary judgment]
Solicitors: Grimshaw & Co, PO Box 6646, Auckland 1141
Heaney & Co, PO Box 105 391, Auckland
Neilsons Lawyers Ltd, PO Box 13 723, Auckland 1643
Blackwells, PO Box 9325, Auckland 1149
Morgan Coakle, PO Box 114, Auckland 1140
And To: CGF Broos, PO Box 35 937, Auckland 0753
LOCKIE V NORTH SHORE CITY COUNCIL HC AK CIV 2007-404-6546 6 July 2011
ANDCHRISTOPHER BRUCE COLEMAN First Third Party
ANDBRIAN JAMES JONES Second Third Party
ANDLUMLEY GENERAL INSURANCE (NZ) LIMITED
Third Third Party
The applications
[1] The third defendant applies for:
(a) An order striking out the plaintiffs’ claim against him; and
(b)Summary judgment against the plaintiffs in respect of all their causes of action against him.
The causes of action pleaded against the third defendant
[2] The current statement of claim is dated 29 October 2010. Three causes of action are pleaded against the third defendant. In summary they are:
(a) Paragraphs 40 to 44 – negligence;
(b) Paragraphs 45 to 50 – negligent misstatement; and
(c) Paragraphs 51 to 55 – breach of the Fair Trading Act 1986.
[3] The plaintiffs advised that they no longer pursue the cause of action against the third defendant under the Fair Trading Act 1986. On that basis they do not oppose the striking out of that cause of action. This judgment will therefore concentrate on the causes of action pleaded in negligence and in negligent misstatement.
Background
[4] I set out in chronological order a brief summary of the background facts.
[5] In September 1995 the third defendant entered into an employment agreement and became employed as a consulting engineer at CB Coleman & Associates Ltd.
[6] Between September 1994 to November 1997 a residential building was constructed at 129 Churchill Road, Rothesay Bay, Auckland. This is the property which is the subject of this proceeding.
[7] In November 1997 the first defendant issued a code of compliance certificate following the construction of the building.
[8] On or about 20 February 1998 the plaintiffs entered into a sale and purchase agreement for the purchase of the property as trustees for the Lockie Family Trust. The purchase price was $1,543,000. The day fixed by the contract for settlement was 17 April 1998, or earlier by mutual agreement. The contract was unconditional.
[9] On or about 1 April 1998 one of the plaintiffs, Mrs Lockie, contacted CB Coleman & Associates Ltd seeking a ―pre-purchase‖ report. She was put through to Dr Walls, the third defendant, on the basis that he would be dealing with any report.
[10] Mrs Lockie entered into a written agreement with CB Coleman & Associates Ltd formally contracting with them to provide her with a pre-purchase inspection report. Following the execution of that agreement, Dr Walls carried out a visual inspection of the property for the purpose of preparing a report. On or about 3 April
1998 a report on the letterhead of CB Coleman & Associates Ltd was sent to Mrs Lockie. The report, which will be referred to in greater detail later in this judgment, concluded with the advice:
The present structural state of the house as far as can be ascertained for a visual inspection, indicates that there are no structural deficiencies.
We would expect that the house will continue to serve its purpose for many years provided the usual maintenance items are attended to.
If you require any clarification or any matters discussed, or if you require any further assistance, please free to give me a call.
[11] The report was signed by the third defendant with reference to his qualifications and the fact that he was a senior building engineer and over the statement ―CB Coleman & Associates Ltd, Consulting Engineers‖.
[12] On or about 17 April 1998 the plaintiffs completed settlement of the purchase of the property.
[13] In mid-1999 the plaintiffs engaged the second defendant to prepare plans and specifications for construction of alterations to the property comprising the enclosure of the front door entry and the addition of a bedroom and ensuite in a roof space above the garage.
[14] On 24 August 1999 the plaintiffs applied to the Council for a building consent for alterations. The building consent was granted on 6 September 1999. Between about November 1999 and May 2000 the second defendant carried the building works involved in the alterations and the first defendant inspected the building works in relation to the alterations.
[15] CB Coleman & Associates Ltd was struck off the Registrar of Companies. A search of this company was obtained from the Companies Office and was made available to me on a consent basis. It was common ground that the company was struck off in about 2000. The company search discloses that it had two directors, namely CB Coleman and SE Coleman. The company’s secretary resigned on 1 July
1997. The shareholders of the company were the original secretary, Mr BJ Jones, Mr CB Coleman and Mrs SE Coleman.
[16] Mrs Lockie, in her affidavit, says it was not until 2007, when she and her husband engaged the building surveyors Hampton Jones, that they discovered that the property had serious building defects and required significant remedial works. She said they had the property reclad in 2010 and that the cost of the remedial works was over $700,000.
[17] On 24 October 2007 the plaintiffs filed this proceeding in the High Court. At the first case management conference held in respect of the proceeding on
11 December 2007 the plaintiffs sought leave to join the third defendant as a further defendant. Leave was granted that day. On 14 December 2007 an amended statement of claim containing causes of action against the third defendant was filed in the High Court.
The court’s approach to strike out applications
[18] Rule 15.1 of the High Court Rules provides:
15.1 Dismissing or staying all or part of proceeding
(1) The court may strike out all or part of a pleading if it—
(a) discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b) is likely to cause prejudice or delay; or
(c) is frivolous or vexatious; or
(d) is otherwise an abuse of the process of the court.
(2) If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.
(3) Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
(4) This rule does not affect the court's inherent jurisdiction.
[19] The general principles to be applied in a strike out application are well known. They were confirmed in Attorney-General v Prince and Gardner where the Court of Appeal said:1
A striking-out application proceeds on the assumption that the facts pleaded in the statement of claim are true. That is so even although they are not or may not be admitted. It is well settled that before the Court may strike out proceedings the causes of action must be so clearly untenable that they cannot possibly succeed (R Lucas & Son (Nelson Mail) Ltd v O’Brien [1978]
2 NZLR 289 at pp 294-295; Takaro Properties Ltd (in receivership) v Rowling [1978] 2 NZLR 314 at pp 316-317); the jurisdiction is one to be exercised sparingly, and only in a clear case where the Court is satisfied it has the requisite material (Gartside v Sheffield, Young & Ellis [1983] NZLR
37 at p 45; Electricity Corporation Ltd v Geotherm Energy Ltd [1992] 2
NZLR 641); but the fact that applications to strike out raise difficult questions of law, and require extensive argument does not exclude jurisdiction (Gartside v Sheffield, Young & Ellis).
1 Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA) at 267.
[20] The principles referred to above were endorsed in Couch v Attorney- General.2
[21] The court can have regard to evidence put forward either in opposition or support of the application provided it does not contradict that which is pleaded in the statement of claim: Attorney-General v McVeagh.3
[22] Caution is required, particularly where the case involves allegations of duties of care in novel situations. That has to be measured against the position that defendants should not be subjected to substantial costs by defending untenable claims: Queenstown Lakes District Council v Charterhall Trustees Ltd.4
[23] Because the inquiry in this case involves limitation issues, it is appropriate that I set out the approach to strike out applications where these matters are raised.
[24] Matai Industries Ltd v Jensen,5 referring to the decision of the English Court of Appeal in Ronex Properties Ltd v John Laing Construction Ltd,6 observed in summary:
(a) That a defendant could never apply to strike out a claim against him as disclosing no reasonable cause of action merely because he might have a good limitation defence;
(b)A defendant who believes he has a good limitation defence may, however, either plead the defence and seek trial of the defence as a preliminary issue or, in a clear case, apply to strike out the plaintiff’s claim on the grounds that it is frivolous, vexatious and an abuse of
process;
2 Couch v Attorney-General [2008] NZSC 45; [2008] 3 NZLR 725.
3 Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566.
4 Queenstown Lakes District Council v Charterhall Trustees Ltd [2009] NZCA 374; [2009]
3 NZLR 786 at [16].
5 Matai Industries Ltd v Jensen [1989] 1 NZLR 525 (HC) at 531-532.
6 Ronex Properties Ltd v John Laing Construction Ltd [1983] QB 398 (CA).
(c) The onus is on the defendant to show that the plaintiff’s claim is
statute-barred;
(d) Evidence can be tendered by affidavit; and
e) The court should be slow to strike out a claim or cause of action altogether in limine; but against that, if the position is quite clear, the defendant should not be vexed by having to go to full trial when the answer is obvious and inevitable.
[25] This position7 was endorsed by the Supreme Court in Murray v Morel & Co
Ltd.8
The court’s approach to a summary judgment application by a defendant
[26] Rule 12.2(2) of the High Court Rules requires that the defendant satisfy the court that none of the causes of action in the plaintiff’s statement of claim can succeed.
[27] Westpac Banking Corp v MM Kembla (New Zealand) Ltd noted the following when dealing with r 136(2), the predecessor of r 12.2(2):9
[58] The applications for summary judgment were made under R 136(2) of the High Court Rules which permits the Court to give judgment against the plaintiff ―if the defendant satisfies the Court that none of the causes of action in the plaintiff's statement of claim can succeed‖.
[59] Since R 136(2) permits summary judgment only where a defendant satisfies the Court that the plaintiff cannot succeed on any of its causes of action, the procedure is not directly equivalent to the plaintiff's summary judgment provided by R 136(1). …
[60] Where a claim is untenable on the pleadings as a matter of law, it will not usually be necessary to have recourse to the summary judgment procedure because a defendant can apply to strike out the claim under R 186. Rather R 136(2) permits a defendant who has a clear answer to the plaintiff which cannot be contradicted to put up
7 Matai Industries Ltd v Jensen, above n 5.
8 Murray v Morel & Co Ltd [2007] NZSC 27; [2007] 3 NZLR 721 at [33].
9 Westpac Banking Corp v MM Kembla (New Zealand) Ltd [2001] 2 NZLR 298 (CA).
the evidence which constitutes the answer so that the proceedings can be summarily dismissed. The difference between an application to strike out the claim and summary judgment is that strike-out is usually determined on the pleadings alone whereas summary judgment requires evidence. Summary judgment is a judgment between the parties on the dispute which operates as issue estoppel, whereas if a pleading is struck out as untenable as a matter of law the plaintiff is not precluded from bringing a further properly constituted claim.
[61] The defendant has the onus of proving on the balance of probabilities that the plaintiff cannot succeed. Usually summary judgment for a defendant will arise where the defendant can offer evidence which is a complete defence to the plaintiff's claim. Examples, cited in McGechan on Procedure at HR 136.09A, are where the wrong party has proceeded or where the claim is clearly met by qualified privilege.
[62] Application for summary judgment will be inappropriate where there are disputed issues of material fact or where material facts need to be ascertained by the Court and cannot confidently be concluded from affidavits. It may also be inappropriate where ultimate determination turns on a judgment only able to be properly arrived at after a full hearing of the evidence. Summary judgment is suitable for cases where abbreviated procedure and affidavit evidence will sufficiently expose the facts and the legal issues. Although a legal point may be as well decided on summary judgment application as at trial if sufficiently clear (Pemberton v Chappell [1987] 1 NZLR 1), novel or developing points of law may require the context provided by trial to provide the Court with sufficient perspective.
[63] Except in clear cases, such as a claim upon a simple debt where it is reasonable to expect proof to be immediately available, it will not be appropriate to decide by summary procedure the sufficiency of the proof of the plaintiff's claim. That would permit a defendant, perhaps more in possession of the facts than the plaintiff (as is not uncommon where a plaintiff is the victim of deceit), to force on the plaintiff's case prematurely before completion of discovery or other interlocutory steps and before the plaintiff's evidence can reasonably be assembled.
[64] The defendant bears the onus of satisfying the Court that none of the claims can succeed. It is not necessary for the plaintiff to put up evidence at all although, if the defendant supplies evidence which would satisfy the Court that the claim cannot succeed, a plaintiff will usually have to respond with credible evidence of its own. Even then it is perhaps unhelpful to describe the effect as one where an onus is transferred. At the end of the day, the Court must be satisfied that none of the claims can succeed. It is not enough that they are shown to have weaknesses. The assessment made by the Court on interlocutory application is not one to be arrived at on a fine balance of the available evidence, such as is appropriate at trial.
[28] These passages were approved by the Privy Council in Jones v Attorney- General.10
The causes of action analysed
The negligence cause of action
[29] The plaintiffs’ claim alleges a breach of duty of care in preparing a pre- purchase report. The breach is pleaded as a failure to identify the original defects and bring them to the attention of the plaintiffs. It is alleged that as a result of Mr Wallace’s breach the plaintiffs were unaware of the original defects and accordingly lost the opposition to:
(a) Terminate the sale and purchase contract;
(b) Negotiate with the vendors to have the defects rectified; and
(c) Make a claim for damages against the vendors.
[30] The plaintiffs claim that they have suffered economic loss in the sum of
$631,756 together with certain consequential loss.
[31] In The Law of Torts in New Zealand the authors set out the position which applied prior to 1963 where party A made a false statement to party B, which B relied upon to his or her detriment.11 If A was merely negligent in making the statement B’s causes of action were limited to a claim in contract or a claim in fraud in equity for equitable indemnification. If the circumstances did not fall with one or other of those causes of action B was left remediless. The authors record that there was much dissatisfaction with that position. The House of Lords considered the
position in Hedley Byrne & Co Ltd v Heller & Partners Ltd.12 In that decision their
Lordships held that a duty of care could lie in making a statement or giving advice to
10 Jones v Attorney-General [2004] 1 NZLR 433 (PC) at [5].
11 Stephen Todd (ed) The Law of Torts in New Zealand (5th ed, Brookers, Wellington, 2009) at
[5.8.03].
12 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (HL).
another person. The authors record that the judgments are lengthy and complex but add:13
[T]he key issues perhaps are captured in extracts from the judgments of Lords Reid and Morris.14 Lord Reid said:
A reasonable man, knowing that he was being trusted or that his skill and judgment were being relied on, would, I think, have three courses open to him. He could keep silent or decline to give the inform or advice sought: or he could give an answer with a clear qualification that he accepted no responsibility for it or that it was given without that reflection or inquiry which a careful answer would require: or he could simply answer without any such qualification. If he chooses to adopt the last course he must, I think, be held to have accepted some responsibility for his answer being given carefully, or to have accepted a relationship with the inquirer which requires him to exercise such care as the circumstances require.
Lord Morris said:
My lords, I consider … that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies on such skill, a duty of care will arise. The fact that the service is to be given by means of, or by the instrumentality of, words can make no difference. Furthermore, if, in a sphere in which a person is so placed that others could reasonably rely on his judgment or his skill or his ability to make careful enquiry, a person takes it on himself to give information or advice to, or allows his information or advice to be passed on to another person who, as he knows or should know, will place reliance on it, then a duty of care will arise.
[32] The authors then say:
These extracts direct our attention to two questions. The first is concerned with the notion of a person accepting or assuming responsibility for his or her words, and the second with the nature of the relationship between the person giving advice and the person who acts upon that advice.
[33] The following points must be noted in relation to the cause of action in negligence and the facts of this case:
13 Todd, above n 11, at [5.8.03].
14 Hedley Byrne, above n 12, at [502]-[503].
(a) Dr Walls had no involvement in carrying out the actual building work which is alleged to have been defective;
(b)Dr Walls had no involvement with the process associated with the building work, such as inspection for the purposes of plans approval, building consent, or building inspection for code of compliance approval; and
(c) an essential ingredient of the matters relied upon to support this cause of action is the failure to bring to the attention of the plaintiffs the defects. In short, this is a claim that Dr Walls was negligent in making the statement he did, or omitted to do, in his report.
[34] Without the development introduced by the House of Lords in Hedley Byrne
& Co Ltd v Heller & Partners Ltd the plaintiffs would have no cause of action in negligence. Their cause of action is one of negligent misstatement not negligence simplicita. I accept Mr Telle’s submission that the plaintiffs’ negligence cause of action is therefore entirely misconceived and without merit.
[35] Mr Lewis sought to draw an analogy with claims brought against territorial authorities for failure to identify defects in the course of building inspections and to bring them to the attention of the owner. In my view, all such claims are distinguishable because they are claims that arise or are associated with the building work that is undertaken. The essence of the claims are that if the Council had carried out its work at the appropriate time, that is, if it relates to the plans approval stage, then no building consent would issue, or in relation to completion of the building works, then ultimately no code of compliance certificate would issue. By contrast, the claim pleaded in negligence in this case, is negligence in the actual giving of advice to the plaintiffs. Accordingly, I do not consider that the claims involving local authorities lend any support in relation to a cause of action in negligence simplicita arising out of an allegation which alleges the tortfeasor has failed to give advice or has negligently made a statement to the plaintiff. The proper place for such a claim is in the cause of action alleging negligent misstatement.
Negligent misstatement cause of action
[36] The plaintiffs plead as follows:
(a) Dr Walls made the following statements in the report he issued:
The house is a contemporary style house constructed about three years ago, near the cliff top in Murrays Bay. It is in very good condition and appears to have been well constructed. …
From a structural point of view, there are no existing problems which could be identified and we have no reason to believe that there should be any new problems arising in the future. …
The present structural state of the house, as far as can be ascertained from a visual inspection, indicates that there are no structural deficiencies
We would expect that the house will continue to serve its purpose for many years providing the usual maintenance items are attended to.
(b)The pre-purchase report was a statement by Dr Walls and that he did not have reasonable grounds to be satisfied that its contents were true and correct;
(c) Dr Walls owed a duty to exercise reasonable care and skill in making the statement because:
(i)the plaintiffs were owners of residential properties who were members of a class of persons who:
(1)rely on pre-purchase inspectors to carry out their inspection with due skill and care; and
(2)are vulnerable to a risk of loss arising from a failure of a pre-purchase inspector to exercise reasonable skill and reasonable care in undertaking inspections;
(ii)there is a special relationship between the plaintiffs, as the owner of the residential property, and Dr Walls, who inspected the property;
(iii)Dr Walls possessed special skill and knowledge about the building controls and standards relating to the construction of residential properties under the Building Act 1991 and the Building Code;
(iv)Dr Walls assumed responsibility for the statements which were made to the plaintiffs;
(d)Dr Walls was in breach of the duty to exercise reasonable skill and care in making the statement because at the time there were no reasonable grounds for him to be satisfied that they were true and correct; and
(e) the plaintiffs suffered loss in the same manner as indicated for the negligence cause of action.
[37] Counsel’s submissions were framed within the accepted general approach to establishing a duty of care. That requires a focus on two broad fields of inquiry. The first is as to the degree of proximity, or relationship, between the parties. The second is whether there are other wider policy considerations that tend to negative, or restrict, or strengthen the existence of a duty of care: Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd.15
[38] Understandably, counsel concentrated on the position of Dr Walls. Dr Walls was, at all material times, the employee of the company which contracted with one of the plaintiffs to complete the pre-purchase report.
[39] I deal briefly with the strike out relief sought. This is advanced on the basis that the claim as pleaded discloses no reasonably arguable cause of action. I have set
15 Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd [2005] 1 NZLR 324 (CA) at [58].
out the approach that the Court is to take in analysing a strike out application at [18]
– [25].
[40] The component elements of a properly pleaded claim based on negligent misstatement in this case are present in the amended statement of claim dated
29 October 2010. In particular, there is pleaded a basis upon which a duty of care exists, a breach of the duty of care, the existence of a special relationship, and the assumption of responsibility by Dr Walls. I conclude that as pleaded there is a reasonably arguable cause of action.
[41] The conclusion reached in the previous paragraph, however, does not answer the specific matter that is raised by the dual application. That is because an application for summary judgment by the third defendant has been filed. The third defendant has filed affidavits which have as their purpose the proposition that none of the causes of action in the plaintiffs’ statement of claim can succeed. That is a requirement of r 12.4(5)(c). It is usual for the affidavit of a defendant to precisely allege that position. The point was not taken by Mr Lewis. Indeed, the argument focussed on whether the facts as disclosed in this case, and presented to the Court, were such that either:
(a) there was no special relationship between one of the plaintiffs and
Dr Walls; or
(b)there was no evidential foundation for an assumption of responsibility on his part for the statements made in the pre-purchase inspection report.
[42] Having regard to the position I have recorded in respect of the negligence cause of action, and if the two propositions are answered in Dr Walls’ favour, it would follow that none of the plaintiffs’ remaining causes of action can succeed. That is why it is appropriate to consider the summary judgment application independently of the strike out application.
[43] Dr Walls’ position starts from the proposition that the request for the pre- purchase report was made to his employer, CB Coleman & Associates Ltd. That company’s letterhead is the document which contains the report. Dr Walls’ signature on that report has beneath it his qualifications and then the words:
Senior Building Engineer
CB Coleman & Associates LtdConsulting Engineers.
[44] The affidavits of Dr Walls, Mr SM O’Sullivan, one of the plaintiffs Mrs Lockie and Mr AL Light concentrate principally on the issue of what was expected of a person instructed to carry out a pre-purchase inspection report in 1998 and, in particular, in relation to buildings constructed with a stucco cladding. The views expressed conflict. If it is necessary to resolve the conflict, summary judgment would be declined.
[45] The evidence on the two issues which I have referred to in [41] is limited to two affidavits.
[46] On the question of whether there was a special relationship or whether there had been an assumption of responsibility, one of the plaintiffs Mrs Lockie in her affidavit said as follows:
6.On or shortly before 1 April 1998 I called CB Coleman & Associates Ltd, Consulting Engineers (―CBC‖) about undertaking a pre- purchase inspection of the property. I was put in touch with Kelvin Walls of CBC.
7.Mr Walls indicated that he would inspect the property. I understood Mr Walls was a qualified building engineer. Mr Walls asked me for a copy of the LIM report for the property. I arranged for our lawyer to fax the LIM report to Mr Walls, which was done on 1 April 1998.
8.On 2 April 1998 Mr Walls faxed me a CBC agreement to sign. This is annexed to the affidavit of Mr Walls as exhibit D.
9.I called Mr Walls to discuss the agreement. I asked Mr Walls to advise us of any problems with the property after his inspection as we did not wish to complete the purchase if there were building issues.
10. I signed the CBC agreement and sent it back to Mr Walls.
11. In my conversations with Mr Walls he gave me the impression that he was well qualified to inspect the property and I had confidence in him.
12.We received a report from CBC dated 3 April 1998 (annexed as exhibit E to the affidavit of Mr Walls). We were very pleased with the report. It said the property was in ―very good condition‖,
―appears to be well constructed‖, ―from a structural point of view,
there are no existing problems which could be identified, and we have no reason to believe that there should be any new problems arising in the future‖, ―there are no structural deficiencies‖ and ―we would expect the house will continue to serve its purpose for many years providing the usual maintenance items are attended to‖.
[47] Dr Walls’ response was as follows:
3.1It is correct as Mrs Lockie states that she contacted Coleman & Associates and was then put in touch with me as one of its employees. Coleman & Associates had a very good reputation. People wanting various types of engineering and building advice would get in touch with it because of its reputation. They would then be referred to an engineer at Coleman & Associates to perform the service requested. The Lockie job was referred to me;
3.2I believe it is correct that I would have asked Mrs Lockie for a copy of the LIM report for purposes of carrying out the inspection and preparing the Coleman & Associates’ report. That was standard practice;
3.3It was standard practice of Coleman & Associates to provide the client with a copy of its consultancy agreement which is annexure
―D‖ of my first affidavit to sign before a job was carried out. That is what it did. I would likely have discussed this with Mrs Lockie upon my discussion with her when the job was referred to me and at
the same time I would have requested a copy of the LIM report.
3.4I refer to paragraphs 9 and 11 of Mrs Lockie’s affidavit. Except for the discussion I had with her about obtaining the LIM report and executing the consultancy agreement and then arranging a time to carry out the inspection once the executed consultancy agreement was received by Coleman & Associates, I do not believe or recall having had any further discussions with Mrs Lockie about the inspection or otherwise. Certainly not to the effect that she had any concerns about ―completing‖ the purchase of the property. Coleman
& Associates had a policy of never giving verbal advice. Any discussion I did have with her would have been reflected in the Coleman & Associates’ report. Even if I did have a discussion with Mrs Lockie about the condition of the property, which I deny, any discussion would of course have to be taken in context with what was recorded in the Coleman & Associates’ report;
3.5I would not normally be asked to talk about my qualifications and I do not believe or recall that I had any discussion to that effect with Mrs Lockie as she says in paragraph 11 of her affidavit.
[48] I am required to assess the above evidence having regard to the test which must be met by the third defendant before he can be successful in an application for summary judgment.
[49] Counsel, in their submissions, referred to a number of authorities dealing with the liability of a director/employee of a company who is contractually obliged to carry out certain works on behalf of the complainant party. The following, however, are all cases referred to by counsel where the determination has been made following a full trial:
(a) Morton v Douglas Homes Ltd - the directors of a development company were found personally liable in respect of defective foundations;16
(b)Trevor Ivory Ltd v Anderson – the owner of the orchard who sued the director of a one-man company who provided advice as to the use of a herbicide on the plaintiff’s orchard were unsuccessful against the director personally, following a seven-day trial;17
(c) Dicks v Hobson Swan Construction Ltd (in liq) - there was a finding against the director of the building company, again following a full trial;18
(d)Body Corporate No 205963 v Leuschke Group Architects Ltd (in liq) – judgment was entered against the director of the company which had been the original owner and developer of the building concerned, again after a full trial;19
(e) In another case, Mok v Bolderson, following a hearing before the
Weathertight Homes Tribunal, the High Court referred back to the
16 Morton v Douglas Homes Ltd [1984] 2 NZLR 548 (HC).
17 Trevor Ivory Ltd v Anderson [1992] 2 NZLR 517 (CA).
18 Dicks v Hobson Swan Construction Ltd (in liq) HC Auckland CIV-2004-404-1065, 22 December
2006.
19 Body Corporate No 205963 v Leuschke Group Architects Ltd (in liq) HC Auckland CIV-2006-404-
5572, 9 December 2008.
Tribunal for rehearing a claim against Mr Bolderson, who had completed a pre-purchase inspection for the purchasers of the subject property.20 The case provides no analysis, however, of the assumption of responsibility or special relationship. It appears that those matters were not raised before the judge.
[50] Cases where the position has been considered at the interlocutory stage are now considered.
[51] In Body Corporate 209549 v Akita Construction Ltd I was not satisfied that it was appropriate to enter summary judgment on the defendant director’s application. The defendant director’s company had been involved in the architectural work.21
[52] Similarly, in Body Corporate 202254 v Taylor,22 the Court of Appeal, dealing with both a strike out and summary judgment appeal flowing from two judgments of Keane J23 expressed its unease about determining the issue on what was an interlocutory application with the result that the order striking out the negligence cause of action was reversed, which, of course, had the effect of making totally inappropriate any question of summary judgment on the defendant’s behalf.
[53] By contrast, MacKenzie J in North Shore City Council v Wightman had to consider causes of action under the Fair Trading Act and for negligent misstatement.24 Mr Beazley, who undertook a pre-purchase inspection report on behalf of his employer company, Future Safe Buildings Inspections Ltd, was sued before the Weathertight Homes Resolution Tribunal. The Tribunal, acting on its powers pursuant to s 112 of the Weathertight Homes Resolution Services Act 2006 removed Mr Beazley from the proceedings. That case is of interest because although it is not strictly founded on the High Court Rules strike out jurisdiction, it is an
analogous jurisdiction and it is a case where the Court was prepared to uphold
Mr Beazley being struck out from the proceeding outside a full hearing.
20 Mok v Bolderson HC Auckland CIV-2010-404-7292, 20 April 2011.
21 Body Corporate 209549 v Akita Construction Ltd HC Auckland CIV2005-404-3080,
8 November 2006.
22 Body Corporate 202254 v Taylor [2008] NZCA 317; [2009] 2 NZLR 17 (CA) at [44].
23 Body Corporate 202254 v Taylor HC Auckland CIV-2003-404-3116, 13 April 2005 and
29 August 2006.
24 North Shore City Council v Wightman HC Auckland CIV-2010-404-3942, 30 November 2010.
[54] In Attorney-General v Carter the plaintiffs sued the Attorney-General on behalf of the Ministry of Transport in respect of survey certificates that had been issued in respect of the ship Nivanga under s 217 of the Shipping and Seamen Act
1952.25 The plaintiffs claimed that the survey certificates had been issued
negligently. The common law negligence cause of action was struck out by the High
Court. That ruling was upheld by the Court of Appeal. The Court of Appeal said:26
[25] The concept of reliance is involved in determining whether there has, in the particular case, been an assumption of responsibility, whether actual or deemed. In some, albeit relatively rare cases, the defendant's assumption of responsibility is voluntary. In other words the defendant is found to have undertaken to exercise reasonable care. In such circumstances, which are analogous to, but short of, contract, it is both reasonable and foreseeable that the plaintiff will rely on the undertaking.
[26] In most cases, however, there will be no voluntary assumption of responsibility. The law will, however, deem the defendant to have assumed responsibility and find proximity accordingly if, when making the statement in question, the defendant foresees or ought to foresee that the plaintiff will reasonably place reliance on what is said. Whether it is reasonable for the plaintiff to place reliance on what the defendant says will depend on the purpose for which the statement is made and the purpose for which the plaintiff relies on it. If a statement is made for a particular purpose, it will not usually be reasonable for the plaintiff to rely on it for another purpose. Similarly, if the statement is made to and for the benefit of a particular person or class of persons, and the plaintiff is not that person or within that class, it will not usually be reasonable for the plaintiff to place reliance on it so as to oblige the defendant to assume responsibility for carelessness in its making.
[27] Hence, before the law of torts will impose on the author of a statement a duty to take care the plaintiff must show that it is appropriate, on the foregoing basis, to hold that the author has or must be taken to have assumed responsibility to the plaintiff to take reasonable care in making the statement. If that is shown, the necessary proximity will have been established, leading to a prima facie duty of care. The second inquiry is of course whether policy considerations negate or confirm that prima facie duty. When, as in the present case, the environment which brings the parties together is legislative, the terms and purpose of the legislation will play a major part in deciding the issues which arise. It is the legislation which creates and is at the heart of the relationship between the parties. It will often contain policy signals bearing on that aspect of the inquiry.
[55] The Court found that the Ministry had not assumed, and should not be deemed to have assumed, responsibility to the plaintiff’s to take care in issuing certificates not to harm their economic interests in the ship. The result was there was not the necessary proximity between the parties. The reason for that conclusion was that the purpose for the certificate was entirely different from the purpose for which the plaintiffs claimed to be entitled to place reliance on it. The second reason was that in none of the capacities in which the plaintiff claimed to have suffered loss were they the persons, or of the class of persons, who were entitled to rely on the certificates. That conclusion followed the analysis to which I have referred and which is set out in paragraphs [25] – [28] of the judgment.
[56] This is a negligent advice case. For liability to attach there must be an assumption of responsibility, whether actual or imputed. The assumption of responsibility is to the recipient of the statement. What is required is a personal assumption of responsibility by the employee: Body Corporate 202254 v Taylor.27
[57] I agree with the conclusions of MacKenzie J in North Shore City Council v Wightman that an assumption of responsibility will not necessarily arise from the following factual position:28
(a) Undertaking the personal inspection; (b) Preparation of the report;
(c) Signing of the report;
(d) Sending the report to the claimant;
(e) Offering to discuss the report with the claimant; and
(f) Giving assurances that he had the skills necessary to prepare the report.
[58] All of the above matters are actions carried, in this case, by Dr Walls as part of his employment contract. He is not a director of his employer. There is no
evidence to suggest that he had any role other than that of employee. He is not a shareholder of his employer. He was carrying out work ―for‖ the company not work
―of‖ the company. As with the director in Trevor Ivory Ltd v Anderson, there was nothing to justify a belief on the part of Mrs Lockie that Dr Walls was undertaking a personal commitment as opposed to the known company commitment.29 He was carrying out work ―for‖ the company, not work ―of‖ the company. As with the director in Trevor Ivory v Anderson there was nothing to justify a belief on the part of Mrs Lockie that Dr Walls was undertaking a personal commitment as opposed to the known company commitment.
[59] The second-named plaintiff engaged the company to prepare the report. She did not engage Dr Walls. The payment for this report was made to CB Coleman & Associates Ltd. Mrs Lockie contacted CB Coleman & Associates Ltd in the first instance, and was simply put through to Dr Walls as an employee of CB Coleman & Associates Ltd. The language used in the report was third party language, such as
―we‖. In this respect, the case is quite different from Fairline Shipping Corp v Adamson, where the defendant had given a personal assurance in the first person singular, and on his own personal notepaper, whereas previous correspondence had been under the company’s letterhead.30
[60] In Williams v National Life Health Foods Ltd the House of Lords held that that directors or employees acting on behalf of a company are under no duty to take care in making statements to company clients unless they had assumed responsibility for their words.31 Their Lordships held:
In such a case where the personal liability of the director is in question the internal arrangements between a director and his company cannot be the foundation of a director's personal liability in tort. The inquiry must be whether the director, or anybody on his behalf, conveyed directly or indirectly to the [plaintiffs] that the director assumed personal responsibility towards the [plaintiffs].
[61] In Body Corporate 202254 v Taylor, William Young P and Arnold J were
alive to the concern that ―allowing a claim in tort against the employee would be
29 Above, n17.
30 Fairline Shipping Corp v Adamson [1974] 2 WLR 824 (QB).
inconsistent with the pattern of contractual relationships between the parties‖.32
They further elaborated:33
Where bargains have gone wrong, but the law of contracts offers no effective remedy, those who are disappointed often resort to the law of negligence. … The courts have been very reluctant to confer rights to sue in negligence which are inconsistent with (perhaps just in the sense of going beyond) the rights for which plaintiffs have bargained. As well, to be successful a plaintiff will usually have to show an assumption of personal responsibility by the defendant to the plaintiff which is akin to acceptance of a contractual obligation.
[62] To hold that Dr Walls had personally assumed responsibility for the report in these circumstances would be to give the plaintiffs greater rights than those for which they have bargained.
[63] Like MacKenzie J, I do not consider that the analysis in this case requires any more detailed examination which might occur at trial. The events all took place within a few days. The description of what occurred was outlined by Mrs Lockie, in the manner that I have earlier recorded. The facts do not suggest that the position could be developed in any way which could provide a foundation for an imputed assumption of responsibility by Dr Walls in this case.
[64] Whilst I had reservations about determining the issue in Akita,34 and as I have said, so did the Court of Appeal in Taylor,35 neither case dealt specifically with a negligent misstatement cause of action. In the negligent misstatement cause of action the assumption of responsibility is an ingredient of the tort. In both cases that
I mentioned, the involvement of the party sued spread over a much more extensive period of time than is involved in the case before me. The result is that I conclude that, as a stand-alone cause of action, the defendant has made out a case for summary judgment. It follows, also, that because the first cause of action, that of negligence simplicita, I have found to have no foundation for, that the defendant has satisfied the test set by r 12.2(2), namely that none of the causes of action in the plaintiffs’
statement of claim can succeed.
32 Body Corporate 202254 v Taylor, above n 22 at [29].
33 Ibid, at [16].
34 Body Corporate 209549 v Akita Construction Ltd, above n 21.
35 Body Corporate 202254 v Taylor, above n 22
[65] This is a case, in my view, where the abbreviated procedure and affidavit evidence has sufficiently exposed the facts and the legal issues. There is, in fact, no dispute concerning the central issue. Accordingly, it is an appropriate case where summary judgment should be entered in favour of Dr Walls. Accordingly, the defendant is entitled to summary judgment.
[66] My conclusion makes it unnecessary to consider the alternative grounds advanced by Mr Telle. However, in the case of two of these grounds, I set out my views in case I am found to be wrong on the principal ruling made in this judgment.
Was the report causative of the plaintiffs’ loss?
[67] Mr Telle submitted in relation to the causation argument as follows:
47.1Even if Mr Walls had identified the defects which he allegedly should have (which is denied), given the condition of the property and the fact the plaintiffs had entered into an unconditional agreement for sale and purchase preventing them from carrying out any invasive testing, there would not have been sufficient available evidence at the time to justify cancellation i.e. the only way one could have known whether any of the alleged defects were in fact causing damage would have been by having to carry out invasive testing. Given the problems with monolithic plaster clad were unknown at the time it would not have been unreasonable, and in fact to the contrary reasonable, for the vendors to have refused any kind of investigation of this type. Even then given how new the house was and that the damage was not discovered until over 9 years later, it can safely be said that no damage would have been discovered in 1998 to have entitled the Lockies to cancel.
[68] In my view this submission is appropriately answered by the decision in Bernard v Space 2000 Ltd.36 The plaintiff there purchased a business from the defendant. He delivered a copy of the contract to his solicitor. The business traded at a loss and was sold at a considerable loss some 18 months later. The plaintiff sued the vendor and other parties, including his solicitor. The Court of Appeal, dealing with a factual position which is similar to the present one, namely the existence of
the contract before the party who was asked to report was instructed, concluded that it was not appropriate to enter summary judgment in those circumstances in favour
of the defendant reporting or advising party in that case. That was because the Court
36 Bernard v Space 2000 Ltd (2001) 15 PRNZ 338 (CA).
concluded that questions of causation were unsuitable for resolution on an application by the defendant for summary judgment. It was only with a full grasp of the facts that the Court would be able to make a proper decision.
[69] Confronted with Bernard v Space 2000 Ltd Mr Telle elected to pursue this ground to support the summary judgment application no further. Be that as it may, in my view, in view of the guidance given by the Court of Appeal this ground would not be an appropriate basis for my entering summary judgment in favour of the third defendant in this case.
Limitation defences
[70] Mr Telle advanced two limitation defences, which were separate and independent of each other. Either, he submitted, were a complete answer to the plaintiffs’ claim and therefore, in terms of the authorities that have been referred to earlier in this judgment, justify the entry of summary judgment in the third defendant’s favour. I deal first with the defence based on s 4 of the Limitation Act
1950.
Limitation Act 1950, s 4 defence
[71] Section 4 of the Limitation Act 1950 provides:
4Limitation of actions of contract and tort, and certain other actions
(1) Except as otherwise provided in this Act or in subpart 3 of Part 2 of the Prisoners' and Victims' Claims Act 2005, the following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued, that is to say,—
(a) actions founded on simple contract or on tort:
[72] This defence requires a consideration of when the cause of action accrued in this case.
[73] In Murray v Morel & Company Ltd the Supreme Court had to consider a cause of action pleaded in negligent misstatement in relation to information put in a prospectus in 1994.37 The proceedings were not issued until 2003.
[74] The Supreme Court found that there was no general doctrine of reasonable discoverability before a cause of action accrued. That position was affirmed in its later decision Davys Burton v Thom.38 The Supreme Court added that the six-year limitation period is imposed and therefore starts to run from when the damage caused by the negligence actually accrued. Whether or not there was any knowledge of this damage did not apply except for those limited cases, for example, parties of
the class pursued in negligence involving latent defects for construction/building works that they were involved in. In those cases, knowledge itself was the foundation for the loss because until there was knowledge of the defects the market would not respond and disclose a reduction in value, and therefore loss to the plaintiff concerned in respect of the subject property.
[75] Mr Lewis referred to the judgment of Priestley J in Body Corporate 183523 v Tony Tay & Associates Ltd.39 In that case, his Honour considered a claim for negligent misstatement arising from the issue by Mr Tay of a Practical Completion Certificate. Mr Tay was a director of the developer company and he was also an architect. The plaintiffs alleged that Mr Tay, in signing a Practical Completion Certificate, was, in fact a tortfeasor based on a cause of action of negligent
misstatement. The Judge reviewed the authorities dealing with where an individual has carried out some act or omission which involves the company in respect of which the person was a director, or perhaps an employee. The Judge found that in the discharge of its responsibilities as the vendor’s agent, the first defendant, in respect of whom Mr Tay was a director, was negligent. He went on to find, however, that there had been no assumption of responsibility by Mr Tay towards the plaintiffs in respect of the certificate which he gave, and on that he was not liable to plaintiffs. He went on to consider a limitation defence that had been raised by Mr Tay, in case
his conclusion in respect of Mr Tay’s liability was found to be in error. After
37 Murray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721.
38 Davys Burton v Thom [2008] NZSC 65 [2009] 1 NZLR 437.
39 Body Corporate 183523 v Tony Tay & Associates Ltd HC Auckland CIV 2004-404-4824,
30 March 2009.
reviewing the authorities he considered that he was bound by the Privy Council decision in Invercargill City Council v Hamlin because the cause of action did not accrue until the damage had been discovered with the result that Mr Tay would not be protected by the limitation defence he had pleaded.40
[76] It is apparent that the issue of the Practical Completion Certificate was part of the building process.
[77] The services which were provided by Dr Walls were completed with the production of the report on 3 April 1998. Six years from that time is 3 April 2004. The proceedings issued against Dr Walls were issued in December 2007.
[78] The statement of claim pleads in paragraph 48 that the alleged breaches by Dr Walls in the report resulted in the plaintiffs being unaware of the original defects and therefore consequently losing:
The opportunity to:
a.Terminate the sale and purchase agreement for breach of the vendor warranty at clause 6.0(8) (―the vendor warranty‖); and/or
b.Negotiate with Mr & Mrs Woolmore to have the Original Defects rectified by Mr & Mrs Woolmore or the cost of rectification paid for by Mr & Mrs Woolmore, as a condition of settlement; and/or
c.Make a claim for damages against Mr & Mrs Woolmore for breach of the vendor warranty, within the 6 year limitation period.
[79] It is self-evident from the matters referred to in the last paragraph that this is a claim not for damage to the plaintiffs’ pocket by their loss of value in relation to the building concerned, but is rather a loss of opportunity to take certain action. As such, it is not within the latent defect class of case dealing with economic loss where discoverability of the loss is a foundation for determining that a loss has occurred and therefore a cause of action will have accrued. Counsel referred to the judgment of Priestley J in Body Corporate 183523 v Tony Tay & Associates Ltd earlier
discussed.41 The issue of the Practical Completion Certificate seems to me to be a
step taken in the building process and, therefore, falls clearly within the latent
40 Invercargill City Council v Hamlin [1996] 1 NZLR 513 (PC).
41 Body Corporate 183523 v Tony Tay & Associates Ltd, above, n 29.
defects for leaky homes cases exception in Hamlin and is distinguishable on that basis.
[80] Accordingly, I conclude that the cause of action is, in this case, barred by the
Limitation Act 1950.
Contractual limitation
[81] I am not satisfied that there was sufficient information placed before me to make a final ruling on this defence. I explain why shortly in this judgment.
[82] Dr Walls seeks, by way of an alternative limitation defence, to rely on the provisions of the consultancy agreement entered into by Mrs Lockie and CB Coleman & Associates Ltd.
[83] Specific clauses in that agreement are relevant to this consideration. They are the following:
[7] Neither the client nor the consultant shall be considered liable for any loss or damage resulting from any occurrence unless claim is formally made on him or her within six years from completion of the services.
[8] The client shall indemnify the consultant against the adverse affects of all claims including such claims by third parties which arise out of or in connection with the agreement and are made after the expiry of the period of liability referred to in clause 7.
[84] As with the Limitation Act 1950 defence, Dr Walls relies on the same limitation period that I have earlier referred to. In short, time would begin to run from the delivery of the report on 3 April 1988 or from the settlement of the purchase of the property, namely 17 April 1998. In either case, the six-year limitation period would expire by April 2004, over three years before the proceedings were actually issued against Dr Walls.
[85] The agreement is described as a short-form agreement for consultant engagement – domestic. CB Coleman & Associates Ltd is referred to in the head of the agreement as consulting engineers. The client is described as Mrs Lockie. The
agreement provides that the client engages the consultant to provide the services described and the consultant agrees to perform the services for the remuneration specified.
[86] Mr Lewis submitted that clause 7 was restricted to claims made by third parties, that is, people who were not parties to the consultancy agreement.
[87] I reject that submission. Clause 7 makes no reference to third parties. It refers solely to the liability of either the client, who was one of the plaintiffs, or the consultant, namely Dr Walls’ employer. Both are the contracting parties. Accordingly, the claim restricts the bringing of the claim by one of the contracting parties against the other after the expiry of six years from the completion of the services provided.
[88] The position just outlined is consistent with the approach adopted by Rodney
Hansen J in Law Sue Consultants Ltd v Gross.42
[89] That case involved negligent engineering services provided by Law Sue Consultants Ltd in the construction of a new house for Mr and Mrs Gross. Clause 7 of the short-form agreement was similar to clause 7 in the agreement under consideration in this case. It provided:
Neither the Client nor the Consultant shall be considered liable for any loss or damage resulting from any occurrence unless a claim is formally made on him or her within the six years from completion of the Services. …
[90] The Court held that the plaintiff’s claim in both contract and in negligence was time-barred; the claims having been made more than six years after Law Sue Consultants Ltd’s services.
[91] Mr Lewis next submitted that clause 8 made no sense because it, in effect, asserted that the client, one of the plaintiffs in this case, is to indemnify the
consultant against claims by the client. He said, if that was its intention the clause
42 Law Sue Consultants Ltd v Gross HC Auckland CIV-2010-404-00584, 31 August 2010.
would simply state that the client cannot claim against the consultant. He submitted that clause 8 must therefore have been referring to third parties.
[92] I do not consider that clause 8 assists in the interpretation of clause 7. In my view clause 8 is clear in its meaning and effect. Its purpose is to give the consultant indemnity in those situations where claims by third parties are made against the consultant after the expiry of the six-year period from completion of the service referred to in clause 7. Its effect is clear. Clearly, clause 8 would be required by the consultant because the consultant does not have protection from claims by third parties beyond the six-year period referred to in clause 7. The only way the consultant can get protection from such claims is to be indemnified in respect of them by the client. I find no ambiguity or lack of purpose in clause 8. Nor do I consider it assists the plaintiffs in this case.
[93] In preparing this judgment, I realised that there were aspects of this defence which had not been covered by counsel in their submissions. Had a determination of this defence been required to determine the third defendant’s application I would have called for further submissions. In the circumstances, I simply list the areas that are of concern to me, which are the following:
(a) Mr Telle placed some reliance on the Contracts (Privity) Act 1982. I would need to be satisfied that the Contracts (Privity) Act 1982 is applicable where a party simply relies on the contract as the basis for an affirmative defence: Laws of New Zealand record that there is no
authority on the point;43
(b)If reliance on the Contracts (Privity) Act 1982 is necessary, I would want to be further satisfied as to whether the consultancy agreement contained, for the purposes of s 4 of that Act, a sufficient designation to include Dr Walls. Counsel’s submission did refer to some authorities on this point which I will not repeat for the purposes of this discussion. Suffice to say, I consider that further inquiry would need
to be made to resolve this point;
43 Laws of New Zealand Contract, (online ed) at [152].
(c) There may be a basis for an implied contract. This point received no attention at all in counsel’s submissions. I refer to the discussion in Scruttons Ltd v Midland Silicones Ltd.44
[94] Accordingly, I make no ruling on the contractual limitation defence that was relied upon by Mr Telle.
Conclusions
[95] For the reasons set out in this judgment, I conclude that none of the causes of action that the plaintiffs now rely upon can succeed. The third defendant has therefore satisfied the requirements of r 12.2(2) of the High Court Rules and is entitled to summary judgment.
Costs
[96] The effect of the ruling I have made brings to an end the plaintiffs’ claim against the third defendant. My preliminary view is that the third defendant is entitled to costs on a 2B basis. What I propose to do, however, is that if counsel cannot agree on costs memoranda on the issue must be filed and I will rule specifically on it.
Decision
[97] Summary judgment is entered against the plaintiffs on the third defendant’s
application. Costs are reserved. In the event that there is no agreement, memoranda in support, opposition and reply shall be filed and served at seven-day intervals.
JA Faire
Associate Judge
44 Scruttons Ltd v Midland Silicones Ltd [1962] AC 446 (HL) at 480-481 and Elder, Dempster & Co Ltd v Paterson, Zochonis & Co Ltd [1924] AC 522 (HL).
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