Sea Prosperity Limited v Unkovich - [2014] NZHC 3125

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2014-404-001649 [2014] NZHC 3125

BETWEEN
SEA PROSPERITY LIMITED

First Plaintiff

SHONA ADAMS Second Plaintiff

AND

ZELJAN UNKOVICH First Defendant

QBE INSURANCE (INTERNATIONAL) LIMITED

Second Defendant

Hearing: 2 December 2014

Appearances:

P J Napier for Applicants/Defendants
W W Peters for Respondents/Plaintiffs

Judgment:

9 December 2014

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

This judgment was delivered by me at 10.00 am on 9 December 2014 pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

SEA PROSPERITY LTD & ADAMS v UNKOVICH & QBE INSURANCE (INTERNATIONAL) LTD [2014] NZHC 3125 [9 December 2014]

[1] On 29 December 2006 the second plaintiff, as director of the first plaintiff, signed 13 agreements to purchase apartments in Central Auckland, from vendors associated with the Blue Chip group of companies. Four were purchased from Greenstone Pitts Trustees Limited, four from Greenstone Barclay Trustees Limited and five from Turn and Wave Limited.

[2] Although all the agreements were unconditional, Mrs Adams says that at the time she signed the agreements the representative of Blue Chip who orchestrated the transactions told her she would not be bound by the agreements until she sought and had received legal advice.

[3] Mrs Adams consulted the first defendant for advice on the transactions between 8 February and 22 February 2007. In the statement of claim it is alleged that Mr Unkovich explained her obligations and liabilities under the agreements, advised on the low-risk nature of the investments Mrs Adams was making and explained the overall ramifications of the documentation she had signed.

[4] On 23 February 2007 Mrs Adams paid $581,920 to Mr Unkovich as deposits on the transactions she had entered. The same day, Mr Unkovich transferred those deposits to the vendors. Shortly after that the first plaintiff was incorporated. Later it was nominated to complete the purchase of the apartments.

[5] In February 2008 Blue Chip New Zealand Limited went into liquidation and the Blue Chip investment scheme collapsed. Notwithstanding this, Mrs Adams and Sea Prosperity Limited were required to complete the transactions. Negotiations ensued which resulted in an agreed resolution of the rights of the plaintiffs and the Blue Chip group.

[6] Although it is not specifically pleaded, it is the thrust of the case for Sea Prosperity Limited and Mrs Adams that Mrs Adams relied on the advice given by Mr Unkovich in deciding not to cancel the contracts when she had an opportunity to do so, and to pay the deposits. If the case is not struck out the statement of claim can be amended.

[7] The second defendant is the insurer of Mr Unkovich.

[8] Mr Unkovich and QBE apply to strike out the claim under r 15.1 of the High Court Rules. They rely on s 4 of the Limitation Act 1950 and say that the claims against them are frivolous and vexatious as they are time-barred by that section.

[9] In their statement of claim Sea Prosperity Limited and Mrs Adams plead two…

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.

Keep reading for free

Create a free CaseChat account to read Sea Prosperity Limited v Unkovich and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2014] NZHC 3125
Decision Date: 9 December 2014

CaseChat Overview and Summary

Sea Prosperity Limited and Shona Adams sued Zeljan Unkovich and QBE Insurance (International) Limited seeking damages for alleged negligent advice provided by Unkovich. The plaintiffs alleged that Unkovich gave negligent advice regarding the purchase of 13 apartments in Auckland, which led them to enter into the contracts and incur losses when the Blue Chip investment scheme collapsed. Unkovich and QBE applied to have the claim struck out on the basis that it was statute-barred under the Limitation Act 1950. The court had to determine when the cause of action accrued. The plaintiffs argued that the cause of action accrued when they settled the transactions in 2009 and were able to quantify their losses. Unkovich and QBE argued that the cause of action accrued when Unkovich gave advice in February 2007, as the plaintiffs were worse off from that point due to their reliance on the allegedly flawed advice. The court found that the cause of action accrued in February 2007 when Unkovich gave the advice, as the advice was inherently flawed and led the plaintiffs to enter into defective contracts. The court struck out the proceeding as statute-barred. The plaintiffs were ordered to pay costs to the defendants on a 2B basis plus disbursements.

Orders