Oyster Management Ltd v MSC Consulting Group Ltd - [2019] NZHC 913

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2021

[2019] NZHC 913

BETWEEN
OYSTER MANAGEMENT LTD

First Plaintiff

CORINTHIAN TRUSTEES LTD
Second Plaintiff

AND

MSC CONSULTING GROUP LTD

Defendant

Hearing: 21 February 2019

Counsel:

N F Flanagan and D R Green for Plaintiffs (in opposition) R M Flinn and N J Cannon for Defendant (Applicant)

Judgment:

30 April 2019

JUDGMENT OF BREWER J

This judgment was delivered by me on 30 April 2019 at 11:00 am pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Meredith Connell (Auckland) for Plaintiffs Wotton Kearney (Wellington) for Defendant

OYSTER MANAGEMENT LTD v MSC CONSULTING GROUP LTD [2019] NZHC 913 [30 April 2019]

Introduction

[1] The defendant (MSC) applies for strike out of, or summary judgment on, the plaintiffs’ causes of action.

[2] The plaintiffs plead loss arising from negligent misstatement by MSC in a report on the ability of a commercial building to withstand earthquakes. The plaintiffs plead they bought the building in reliance on the report. Alternatively, the plaintiffs bring their claim in negligence.

[3]MSC makes its applications:

(a)against the negligent misstatement claim on the basis it did not owe the plaintiffs a duty of care; and

(b)against the negligence claim on the basis it is time-barred by s 393(2) of the Building Act 2004.

Strike-out/Summary judgment

[4]The threshold for a claim to be struck out is high. The principles are:1

(a)Pleaded facts, whether or not admitted, are presumed to be true. This does not extend to pleaded allegations which are entirely speculative and lacking in foundation.

(b)The causes of action must be so clearly untenable that they cannot possibly succeed.

(c)The jurisdiction to strike out is to be exercised sparingly, and only in clear cases where the Court is satisfied it has the requisite material to make a decision.

1 Carter Holt Harvey Ltd v Minister of Education [2015] NZCA 321, (2015) 14 TCLR 106 at [9]; citing Attorney General v Prince & Gardner [1998] 1 NZLR 262 (CA) at 267–268.

(d)The jurisdiction is not excluded by an application raising difficult questions of law and requiring extensive argument.

[5] The Supreme Court cautions against striking out claims positing novel duties of care prematurely.2 Justice Elias described the question on strike-out as limited to “whether the circumstances relied upon by the plaintiff are capable of giving rise to a duty of care.”3

[6] The approach to summary judgment is similar. The applicant bears the onus of showing that none of the causes of action against them can succeed.4 Summary judgment is appropriate only for cases where the issues can be decided on the affidavits alone.5 It is not appropriate where there are disputed issues of material fact.

[7] Given duties of care are closely bound to the factual contexts in which they arise, strike-out and summary judgment will be appropriate only if the causes of action are plainly hopeless.

Relevant facts

[8] The first plaintiff, Oyster Management Ltd (Oyster), manages…

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: [2019] NZHC 913
Decision Date: 30 April 2019

CaseChat Overview and Summary

In the High Court of New Zealand, Oyster Management Ltd and Corinthian Trustees Ltd sued MSC Consulting Group Ltd for negligent misstatement and negligence. The plaintiffs purchased a building after MSC provided seismic assessments. They alleged the assessments were negligent and that they suffered loss because of this. MSC sought to strike out or obtain summary judgment on the plaintiffs' claims. The court held that the negligent misstatement claim could not be struck out. While the reliance of the plaintiffs was foreseeable, the court found that factual issues remained as to whether there was a duty of care and the extent of the plaintiffs' reliance. The claim in negligence was struck out because the plaintiffs' argument that the limitation period had not expired was not sufficiently strong.

Orders