Smeaton Construction Ltd v Garrett Pasquale Ltd - [2012] NZHC 3079

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CRI-2012-425-228 [2012] NZHC 3079

UNDER The District Courts Act 1947

IN THE MATTER OF an appeal pursuant to s72 of that Act

BETWEEN SMEATON CONSTRUCTION LTD Appellant

ANDGARRETT PASQUALE LIMITED First Respondent

ANDGARRETT KARL PASQUALE Second Respondent

Hearing: 12 November 2012 (Heard at Dunedin)

Appearances: D Tobin for Appellant
G K Pasquale in Person (with K E Hanson as McKenzie Friend) for
Respondents

Judgment: 19 November 2012

RESERVED JUDGMENT OF FOGARTY J

Introduction

[1] Mr Michael Coburn, as a representative of the Coburn Family Trust, entered into an oral agreement with Mr John Smeaton, a director of Smeaton Construction Ltd to build a luxury home at Jack’s Point, Queenstown. With Mr Coburn’s agreement and involvement, Smeaton Construction retained the firm trading as Stone
Heritage on two different projects, stonework and the polishing of extensive concrete

SMEATON CONSTRUCTION LTD V GARRETT PASQUALE LIMITED & Anor HC INV CRI-2012-425-228 [19 November 2012]

floors. Stone Heritage is the trade name of Garrett Pasquale Limited (GPL). Mr Garrett Pasquale is the sole director and shareholder of GPL. This dispute involves problems with two concrete decks; the pool deck surrounding the swimming pool and the upper deck.

[2] Almost as soon as the concrete was poured for the deck surrounding the swimming pool crazed cracks began to appear. These cracks are also described as “plastic shrinkage cracking”. Eventually the decking around the pool was cut up and removed. It was replaced with a new deck.

[3] There were also problems with the upper deck. Those problems were of a lesser and different magnitude. Due to an error in the application of sealants, water got under the seal and mottled the surface. GPL made an attempt to fix the problem and were intending to do further work on it when they were prevented from doing any further work. The problems with the upper deck were remedied by the plaintiff.

[4] Smeaton Construction now sue for damages of $179,763.03. There are two notices of claim under the District Court Rules, one against GPL and the second against Mr Pasquale. Both seek the same sum.

[5] The claim against GPL is that it specified the concrete, failed to oversee the placing of it and:

The contractually required expectation has not been achieved by the Defendant as the concrete has exhibited extreme and unacceptable darkening of cracks generally located at reinforcement locations.

Essentially this pleading alleges that GPL promised the desired outcome, as a contractual obligation.

[6] The second part of the claim against GPL addresses the upper deck, as exhibiting an unacceptable mottled appearance after rain, pleading that attempts by GPL to rectify the problem failed and as a result of the failure the plaintiff was required to redo the concrete work.

The claim against Mr Pasquale pleads that he is the sole director and shareholder of the company and that all the dealings between the plaintiff and GPL were with him. The claim also pleads that he had…

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: [2012] NZHC 3079
Decision Date: 19 November 2012

CaseChat Overview and Summary

Smeaton Construction Ltd sued Garrett Pasquale Ltd (GPL) and Mr Garrett Pasquale in the High Court of New Zealand, seeking damages for defects in the construction of two concrete decks. The plaintiff claimed that GPL was contractually responsible for the specification of the concrete mix, its placement, and the finishing of the pool deck. The plaintiff further argued that GPL was liable for the remedial costs incurred by Smeaton Construction in finishing the upper deck. The plaintiff also sought to hold Mr Pasquale personally liable in negligence for the defects in the pool deck. The District Court dismissed the plaintiff's claims, and Smeaton Construction appealed. The court found that there was no contractual responsibility on GPL for the formula for the concrete mix and its placement. It was concluded that there was no intention between Smeaton Construction and GPL to create a legal relationship whereby GPL took responsibility for the formula for the special mix of concrete and its placing. As a result, GPL was not liable for the crazed cracking that occurred, nor for the defective construction of the pool deck. Additionally, GPL was not liable for the remedial costs incurred by Smeaton Construction in finishing the upper deck. The court also found that there was no negligence on the part of Mr Pasquale, and as such, he was not personally liable for the defects in the pool deck. The appeal was dismissed, and costs were reserved.

This case highlights the importance of clearly defining contractual responsibilities and understanding the roles and obligations of each party involved in a construction project. It also demonstrates that mistakes made by tradesmen are not necessarily considered a breach of contract, and that employers have a duty to mitigate their losses if a party breaches a contractual term. Furthermore, it is crucial to establish a duty of care and prove negligence to hold an individual personally liable in tort.

Orders