Miles v Gadd - [2022] NZCA 227

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA458/2021
[2022] NZCA 227

BETWEEN	DANIEL JOSEPH MILES AND ELIZABETH CHARLOTTE MILES Appellants
AND	BRUCE WILLIAM GADD Respondent

Hearing:	17 February 2022
Court:	Gilbert, Katz and Edwards JJ
Counsel:	B M Easton and D J Powell for Appellants K P Sullivan and D A Bleier for Respondent
Judgment:	7 June 2022 at 2 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellants must pay costs to the respondent for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.

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REASONS OF THE COURT

(Given by Gilbert J)

Introduction

This is an appeal against a judgment of the High Court[1] dismissing a claim alleging a breach of a standard vendor warranty in an agreement for sale and purchase of a unit title property (the agreement).[2] The warranty was that the vendor had no knowledge or notice of any fact which might give rise to or indicate the possibility of the owner or the purchaser incurring any other liability under any provision of the Unit Titles Act 2010 (the Act) or the Unit Titles Act 1972 (the 1972 Act). Eight months after settlement, weathertightness issues were discovered elsewhere in the multi-unit development. Upon further investigation, it emerged that there were numerous weathertightness defects throughout the development and that major remedial works would be required to achieve an enduring solution.
[1]Miles v Gadd [2021] NZHC 1527, (2021) 22 NZCPR 248 [High Court judgment].
[2]Real Estate Institute of New Zealand Incorporated and Auckland District Law Society Incorporated Agreement for Sale and Purchase of Real Estate (9th ed, 2012) [Standard Form Agreement] at cl 8.2(6)(a).
Two questions arise on this appeal. First, what does “any other liability” in the warranty refer to? In particular, does it extend to a possible liability for a levy to address unidentified defects outside the particular unit? Secondly, if so, did the vendor have knowledge or notice of any fact which might give rise to, or indicate the possibility of, any such liability being incurred?

Background

By an agreement dated 28 June 2013, the respondent, Mr Gadd, agreed to sell to the appellants, Mr and Mrs Miles, unit 803 (the apartment) in Sirocco Apartments for $540,000. Sirocco is an 11-storey, 44-apartment building situated in central Wellington and completed in March 1999.
Mr Gadd had owned the apartment since October 2004 and had been a member of the body corporate committee at various times. He lived and worked in Europe for extended periods — June to November 2006 and June 2007 to July 2010 — and was not a member of the body corporate during the latter three-year period. In late 2012, he decided to put the apartment on the market and relocate to Auckland to take up a new position.
The agreement contained the following vendor warranty (the warranty):
8.0 Unit title and cross lease provisions
Unit Titles
…
8.2If the property is 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 Miles v Gadd

Details

AGLC: Miles v Gadd [2022] NZCA 227
Case: [2022] NZCA 227
Decision Date: 7 June 2022 at 2 pm

CaseChat Overview and Summary

This is an appeal against a judgment of the High Court dismissing a claim for breach of a standard vendor warranty in an agreement for sale and purchase of a unit title property. The warranty was that the vendor had no knowledge or notice of any fact which might give rise to or indicate the possibility of the owner or the purchaser incurring any other liability under any provision of the Unit Titles Act 2010 or the Unit Titles Act 1972. Eight months after settlement, weathertightness issues were discovered elsewhere in the multi-unit development. Upon further investigation, it emerged that there were numerous weathertightness defects throughout the development and that major remedial works would be required to achieve an enduring solution. The two questions that arose on this appeal were: first, what does “any other liability” in the warranty refer to; and secondly, if so, did the vendor have knowledge or notice of any fact which might give rise to, or indicate the possibility of, any such liability being incurred? In answering these questions, the Court found that the warranty was not confined to the possibility of a liability under the Acts “in relation to the owner’s unit” and that the warranty could extend to the possible liability arising out of facts of which Mr Gadd had knowledge. However, the Court found that the Judge’s assessment that Mr Gadd did not have knowledge or notice of facts indicating there were systemic weathertightness defects in the building, such that additional levies to investigate and remediate them were a reasonable prospect, was correct. The appeal was dismissed.

Orders