Montecillo Trust v Stevenson Brown Limited - [2016] NZHC 684

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2014-412-001 [2016] NZHC 684

BETWEEN
MONTECILLO TRUST

Plaintiff

AND

STEVENSON BROWN LIMITED Defendant

Hearing: 23 and 24 November 2015

Appearances:

D R Tobin and J C McLeod for the Plaintiff
R W Raymond for the Defendant

Judgment:

14 April 2016

JUDGMENT OF DAVIDSON J

(with answers to two preliminary questions)

MONTECILLO TRUST v STEVENSON BROWN LIMITED [2016] NZHC 684 [14 April 2016]

Para

INDEX

[1] Introduction

[14] The two (formerly three) preliminary questions

Question (1): Was the model IPENZ/ACENZ SHORT FORM AGREEMENT (the short form agreement) incorporated into the contract between the Plaintiff and the Defendant by reason of a previous course of dealings between the Plaintiff’s agent, Mr Rutter, and the Defendant?

[19] Some observations
[21] The ‘agent to know’

The evidence relevant to Question (1)

[24]     The engagement of Mr Rutter by Montecillo
[37]     The course of dealing between Mr Rutter and Stevenson Brown
[49]     The engagement of Stevenson Brown by Mr Rutter for Montecillo

[64] Discussion – Question (1)

[66] Course of dealing – the knowledge held by Mr Rutter
[88] Should Mr Rutter’s ‘knowledge’ be imputed to Montecillo?

[114] Answer to Question (1)

Question (2): Whether the plaintiff’s claim in negligence was commenced after the period allowed for a cause of action in tort by the Limitation Act 1950?

[115] Introduction

[120] The evidence relevant to Question (2)

[160] Discussion - Question (2)

[165] Montecillo’s observation and understanding of defects and damage before
19 December 2007

[178] Montecillo’s understanding and response to the defects and damage
observed

[212] Montecillo’s doubt as to the cause of the defects and damage observed

[217] Answer to Question (2)

Formal Disposition of Questions for Preliminary Determination

Leave Reserved Addendum Annexures A and B

Introduction

[1] Montecillo Trust (‘Montecillo’) owns, and through a company operates, a rest home and hospital (‘the Home’) for veterans and their families at 63 Bay View Rd, St Kilda, Dunedin.

[2] Construction of the Home began in 2005 and Montecillo took occupation in August 2006. The building has been damaged by settlement which Montecillo alleges was caused by the negligence of the defendant engineering company, Stevenson Brown Ltd (‘Stevenson Brown’), in the design and specification of the foundations, and supervision of their construction.

[3] The name Montecillo derives from premises purchased following public subscription in Otago and Southland for a Red Cross military convalescent home, for those returning from The Great War of 1914-1918. The New Zealand Patriotic and Canteen Funds Board ran Montecillo. The Montecillo Trust was established to acquire the former Home in Mornington, Dunedin, and the trustees later took the decision to build a new Home in Bay View Rd.

[4] Montecillo engaged Mr David Rutter, an architectural designer. He has qualifications in draughting, and is a licensed building practitioner, a status accorded to those considered competent to work on the structure and weather-tightness of residential and small to medium sized apartment buildings. He had carried out redesign and upgrade work for Montecillo and…

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: [2016] NZHC 684
Decision Date: 14 April 2016

CaseChat Overview and Summary

Montecillo Trust (Montecillo) is the owner of a rest home and hospital for veterans and their families at Bay View Rd, Dunedin. The building was completed in August 2006. Montecillo alleged that settlement damage to the building was caused by the negligence of Stevenson Brown Ltd (Stevenson Brown), an engineering company engaged to design, and supervise the construction of, the foundations. Montecillo brought proceedings against Stevenson Brown on 19 December 2013. Stevenson Brown raised two defences, which led to two questions being asked of the Court for a preliminary determination. The first was whether the model IPENZ/ACENZ SHORT FORM AGREEMENT (the short form agreement) was incorporated into the contract between the plaintiff and the defendant by reason of a previous course of dealings between the plaintiff’s agent, Mr Rutter, and the defendant. The second was whether the plaintiff’s claim in negligence was commenced after the period allowed for a cause of action in tort by the Limitation Act 1950. The Court answered both questions in the negative. Firstly, the Court found that there was no evidence that Mr Rutter, who was Montecillo’s agent, had detailed knowledge of Stevenson Brown’s contractual practices. The Court also found that Montecillo did not understand that Mr Rutter had any particular knowledge of Stevenson Brown’s practice in commercial contracts. As such, Mr Rutter’s knowledge was not imputed to Montecillo. Secondly, the Court found that the plaintiff’s claim in negligence was commenced within the time allowed for a cause of action in tort by the Limitation Act 1950. The Court found that Montecillo reasonably thought that the defects observed in July 2007 were consistent with minor settlement in the ordinary course. The Court found that it was not until receipt of the Tonkin & Taylor report in January 2008 that Montecillo was given a clear signal that there was a deeper and more significant cause. As such, the Court found that Stevenson Brown had not discharged the onus on it to prove the limitation period began to run before 19 December 2007.

Orders