Martin v Cowan - [2013] NZHC 1274

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-6867 [2013] NZHC 1274

BETWEEN
JULIA MARTIN AND STEPHEN FARRELL

Plaintiffs

AND

JEFFERY PETER COWAN AND PRUDENCE JANE COWAN Defendants

Hearing: 7 May 2013

Appearances:

J Lethbridge for Plaintiffs
I Auld for Defendants

Judgment:

31 May 2013

RESERVED JUDGMENT OF ASSOCIATE JUDGE SARGISSON (Summary Judgment)

This judgment was delivered by me on 31 May 2013 at 4.30 pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date ..........................

MARTIN AND FARRELL v COWAN AND COWAN [2013] NZHC 1274 [31 May 2013]

[1] The defendants, Jeffrey and Prudence Cowan, claim summary judgment

dismissing the plaintiffs’ claim against them. They rely on High Court Rule

12.12(2). It provides:

The court may give judgment against a plaintiff if the defendant satisfies the court that none of the causes of action in the plaintiff's statement of claim can succeed.

[2] The application is opposed.

[3] The essential issue in this application is whether the defendants who are sued in contract solely for breach of warranty have an unassailable defence to the claim in the statement of claim. The defence relied on is that the plaintiffs have no standing to make a valid legal claim for breach of warranty and have in any event suffered no loss. The onus is on the defendants to show they have such a defence.

Background

The claim in the statement of claim

[4] On 27 October 2011 the plaintiffs commenced this proceeding against the Cowans. The basis of the plaintiffs’ claim is that an agreement for sale and purchase entered into on 26 October 2005, between the Cowans as vendors and the plaintiffs as purchasers. The property the Cowans were selling was their house in Reimers Ave, Mt Eden.

[5] On 25 November 2015, as provided for in the agreement, settlement took place and the Cowans parted with possession.

[6] The plaintiffs allege that the Cowans carried out building work on the house and built a garage that did not comply with the Building Act 1991 and thereby breached a standard warranty in the agreement. Relevantly, the warranty states:

6.2The vendor warrants and undertakes that at the giving and taking of possession:
…

(5) Where the vendor has done or caused or permitted to be done on the property any works for which a permit or building consent was required by law

…

(d) All obligations imposed under the Building Act 1991 were fully complied with.

[Emphasis added]

[7] Additionally the plaintiffs allege that they have suffered loss as a result of the breach in that they have expended $15,000 on repairs, suffered loss from diminution of value of $60,000 in relation to the garage and face further expenditure for remedial works estimated at approximately $150,000. They seek judgment as to liability and damages of $225,000.

Statement of defence

[8] In their statement of defence, filed on 14 December 2011, the Cowans admit that the plaintiffs purchased their property but deny they breached the warranty.…

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 Martin v Cowan

Details

AGLC: Martin v Cowan [2013] NZHC 1274
Case: [2013] NZHC 1274
Decision Date: 31 May 2013

CaseChat Overview and Summary

Julia Martin and Stephen Farrell brought a claim against Jeffery Peter Cowan and Prudence Jane Cowan for breach of warranty in relation to a sale and purchase agreement. The plaintiffs alleged that the defendants breached a standard warranty in the agreement by carrying out building work on the house and building a garage that did not comply with the Building Act 1991. The defendants applied for summary judgment, arguing that the plaintiffs had no standing to make a valid legal claim for breach of warranty and had in any event suffered no loss. The court considered the arguments of both parties and determined that there were disputed issues of material fact and that the defendants had not shown that none of the plaintiffs’ claims could succeed. The court declined the summary judgment application and reserved costs. The matter was listed for a further telephone conference before the Associate Judge who is case managing the proceeding.

The essential legal issue in this case was whether the defendants had an unassailable defence to the plaintiffs' claim for breach of warranty. The defendants argued that the plaintiffs had no standing to make a valid legal claim for breach of warranty and had in any event suffered no loss. The plaintiffs argued that they had standing to bring the claim as they were either appointed trustees of the family trust before they commenced the proceeding, or if not, they were the trustees' agents for the purpose of commencing the proceeding. The court considered the arguments of both parties and determined that there were disputed issues of material fact and that the defendants had not shown that none of the plaintiffs’ claims could succeed. The court declined the summary judgment application and reserved costs.

In reaching its decision, the court considered the evidence provided by both parties, including the affidavit of Mr Cowan and a letter produced by Mr Farrell. The court found that the affidavit did not establish that the plaintiffs ceased to be parties to the agreement or that they gave up their rights to sue on the agreement for breach of warranty. The court also found that the letter produced by Mr Farrell did not conclusively establish that the plaintiffs had not suffered a loss. The court determined that further evidence on who actually bore the loss and whether it was the plaintiffs personally or the trust fund would be relevant. The court concluded that it would be imprudent to enter summary judgment where there were disputed issues of material fact and where ultimate determination turned on a judgment only able to be properly arrived at after a full hearing of the evidence.

The final orders of the court were that the application for summary judgment was declined, and costs were reserved in accordance with NZI v Philpott. The matter was listed for a further telephone conference before the Associate Judge who is case managing the proceeding.

Orders