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Roose v Duthie

Roose v Duthie

Case [2015] NZHC 2035 27 August 2015

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-1025 [2015] NZHC 2035

BETWEEN
DENISE MICHELLE ROOSE

First Plaintiff

AND

DENISE DEVELOPMENTS LIMITED Second Plaintiff

AND

DMR DEVELOPMENTS LIMITED Third Plaintiff

AND

CRAIG DUTHIE AND KIRSTEN TAYLOR-RUITERMAN

First Defendants

AND

DRK CHARTERED ACCOUNTANTS LIMITED

Second Defendant

Hearing: 11 March 2015

Appearances:

K Crossland and S Langston for Plaintiffs
G Pearson and L Pelly for Defendants

Judgment:

27 August 2015

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 27 August 2015 at 3:00 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

ROOSE v DUTHIE [2015] NZHC 2035 [27 August 2015]

Introduction [1] The pleaded claims [5] The limitation and pleading issues [7] The factual background alleged by the plaintiffs [11]
The preliminary questions for determination [29]

Commencement of the limitation periods in contract and tort

Do the plaintiffs have an arguable claim that the defendants breached a duty of care under the contract of retainer in connection with advice given regarding the purchase of the property by DMR?

The plaintiffs’ allegation of a continuing duty to correct the erroneous tax advice

[30] [33]

[36]

The defendants’ arguments [37]

Could Mr Duthie have owed Ms Roose a continuing duty in contract, to correct his mistake, that was breached on 2 May 2008?

[39]

Midland Bank Trust Co Ltd [40]

Bell v Peter Browne Co [46]

James v McMahon [51]

Conclusions on claim in contract based on negligent advice

Do the plaintiffs have an arguable claim, brought within time, that the defendants breached a duty of care in tort in connection with advice regarding the purchase of the property by DMR?

[55] [63]

Submissions for the defendants [64] Submissions for the plaintiffs [69] Thom v Davys Burton [79]
Discussion and conclusion on tort claims [83]

Does s 28 of the Limitation Act 1950 allow an extension of the time for bringing the plaintiffs’ claims in contract and tort as a consequence of fraud in connection with advice given regarding the purchase of the property by DMR?

[87]

Alternative argument against claim in equity for breach of fiduciary duty

Do the plaintiffs have a claim for relief against the defendants under the Contractual Mistakes Act 1977 which is saved by s 28 of the Limitation Act?

[93] [98]

Relevant provisions [101]

The plaintiffs’ argument [106]

The defendants’ response [108]

Discussion and conclusion on Contractual Mistakes argument

[112]

Summary of findings [119] Order granting leave to amend pleadings [120] Costs [121]

Introduction

[1] Ms Roose, the first plaintiff, is a real estate agent and a director and shareholder of the second plaintiff, Denise Developments Ltd (“DDL”), and the third plaintiff, DMR Developments Ltd (“DMR”).

[2] The first defendants, Mr Duthie and Ms Taylor-Ruiterman, carried out business as chartered accountants in partnership as Duthie Taylor Ruiterman (“DTR”) until around March 2009. The second defendant, DRK Chartered Accountants Ltd (“DRK”) is another chartered accountancy business of which Mr Duthie is a director and shareholder.

[3] Mr Duthie was a trustee of the…

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 Roose v Duthie

Details

AGLC: Roose v Duthie [2015] NZHC 2035
Case: [2015] NZHC 2035
Decision Date: 27 August 2015

CaseChat Overview and Summary

The case of Roose v Duthie concerns a dispute between Denise Roose, who is a real estate agent and director of two companies, and Craig Duthie, a chartered accountant, as well as his business entities. The central issue revolves around alleged negligent advice provided by Duthie concerning the purchase of a property by one of Roose's companies. The plaintiffs claim that Duthie's advice led to significant tax liabilities that could have been avoided. The court was required to determine whether the plaintiffs' claims in contract, tort, and equity were within the statutory limitation period and whether there was an arguable case for relief under the Contractual Mistakes Act 1977.

The court found that the plaintiffs' claim in contract based on the alleged negligent tax advice was time-barred as the breach occurred before the transfer of the property and there was no continuing duty to correct the error. Similarly, the claim in tort for negligent misstatement was also out of time, as the plaintiffs' loss arose when they entered into a binding agreement, not at the time of settlement. The court further held that Section 28 of the Limitation Act 1950 did not extend the limitation period for the claims in contract or tort, as it only applied to the time of discovery of fraud or mistake, not to the accrual dates of the claims. The plaintiffs were granted leave to amend their pleadings to include a claim for breach of fiduciary duty, which was not subject to limitation by analogy. Finally, the court ruled that the Contractual Mistakes Act 1977 did not provide a basis for relief against Duthie, as it only applies to parties to the contract and does not create a statutory cause of action in negligence against non-parties.

Orders