Smith v Noble Investments Ltd - [2020] NZHC 1236

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2014-409-549

[2020] NZHC 1236

BETWEEN GREGORY ROBERT SMITH and COLIN PETER STOKES
Plaintiffs

AND

NOBLE INVESTMENTS LIMITED

Removed First Defendant

AND

APPLE FIELDS LIMITED

Removed Second Defendant

AND

JUSTIN WILLIAM PRAIN

Third Defendant

AND

CARDNO (NZ) LIMITED

Fourth Defendant

Hearing: 19 May 2020

Appearances:

G D Stringer for Plaintiffs (via VMR, audio only) P B McMenamin for Third Defendant (in person)

H J Dempsey and M R C Wolff for Fourth Defendant (via VMR)

Judgment:

5 June 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 5 June 2020 at 12.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar
5 June 2020

SMITH & STOKES v PRAIN [2020] NZHC 1236 [5 June 2020]

[1] In broad terms there are three applications before the Court. Each of the defendants seeks that this proceeding be struck out or permanently stayed while the plaintiffs seek that a stay entered by Associate Judge Matthews on 22 March 2019 be lifted. The exact nature of the stay ordered on 22 March 2019 is one of the issues between the parties.

[2] The proceeding, which commenced in 2014, has its origins in a contract entered in 2002 (the 2002 contract). I will start with only a bare summary of the matters in issue and deal with the facts in more detail when dealing with the different applications.

Context

[3] The plaintiffs in this litigation, Gregory Robert Smith (Mr Smith) and Colin Peter Stokes (Mr Stokes), claimed against Noble Investments Limited (Noble) (now struck off the Companies Register), for breach of the 2002 contract relating to the purchase by Mr Smith and Mr Stokes of land in a subdivision to be completed by Noble.

[4] The original proceeding was against Noble and Apple Fields Limited (Apple Fields) (now also struck off the Companies Register), which was the company used by Noble to manage the development of this particular subdivision. That claim was for breach of contract and misrepresentation. Further, Mr Smith and Mr Stokes claim that they are the victims of deceit perpetuated by a director of Apple Fields, the third defendant, Justin William Prain (Mr Prain), and the fourth defendant, Cardno (NZ) Limited (Cardno), which was a company engaged by Noble to acquire the requisite consents and assist in the planning of the subdivision in question.1

[5] The plaintiffs, in the 2002 contract, purchased from Noble what is referred to in the 2002 contract and the statement of claim as “Lot 9”. The plaintiffs also purchased Lot 19 and also a one-tenth share of Lot 22. Lot 22 is a strip of land that served as a right of way.

1 Summary paraphrased from judgment of Gendall J in Smith v Noble Investments Ltd [2015] NZHC 3006.

[6] The 2002 contract contained the following Further Terms (FT) of sale which are central to the plaintiffs’ claim:

[FT] 14. Following completion…

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: [2020] NZHC 1236
Decision Date: 5 June 2020

CaseChat Overview and Summary

The matter before the Court was an application by two defendants, Justin William Prain and Cardno (NZ) Limited, for the proceedings brought by Gregory Robert Smith and Colin Peter Stokes to be dismissed for want of prosecution. The defendants also sought to strike out the plaintiffs' claim on the basis that it disclosed no reasonably arguable cause of action, was likely to cause prejudice or delay, was frivolous or vexatious, or was otherwise an abuse of process of the court. The plaintiffs opposed the applications and sought to lift a stay of the proceedings that had been imposed by the Court. The Court dismissed the plaintiffs' application to lift the stay and dismissed the plaintiffs' claim against the defendants under r 15.1(a) of the High Court Rules for disclosing no reasonably arguable cause of action. The Court found that the plaintiffs' pleadings were defective and that they were unable to plead facts, matters or circumstances that showed the defendants knew that the representations relied on were untrue. The Court also found that the plaintiffs' approach to loss was incorrect and that they had failed to comply with the directions made that they properly particularise their loss. The Court found that the defendants had been seriously prejudiced by the delay and the inadequacy of the pleadings and that the delay was inordinate and inexcusable. The Court dismissed the plaintiffs' application to lift the stay and dismissed their claim against the defendants.

Orders