Tadd Management Limited v Weine - [2024] NZSC 183

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI O AOTEAROA

SC 87/2024
[2024] NZSC 183

BETWEEN	TADD MANAGEMENT LIMITED Applicant
AND	RUTH RENTON WEINE AND MICHAEL DAVID HOFMANN-BODY AS TRUSTEES OF THE RUTH WEINE FAMILY TRUST Respondents

Court:	Williams and Miller JJ
Counsel:	F B Q Collins for Applicant M Freeman for Respondents
Judgment:	20 December 2024

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

B The applicant must pay the respondents one set of costs of $2,500.

____________________________________________________________________

REASONS

The applicant, Tadd Management Ltd (Tadd), seeks leave to appeal a decision of the Court of Appeal on the issue of common mistake under s 24 of the Contract and Commercial Law Act 2017 (CCLA).[1] The factual background is not in dispute and we adopt the Court of Appeal’s summary of the facts.[2]
[1]Weine v Tadd Management Ltd [2024] NZCA 323, (2024) 16 TCLR 855 (Ellis, Gault and Cull JJ) [CA judgment].
[2]At [2]–[14].
In essence, the dispute arose after Tadd bought a commercial property in Lower Hutt at auction from the Ruth Weine Family Trust. An Initial Seismic Assessment (ISA) was undertaken by New Zealand Consulting Engineers Ltd (NZCE) at the trustees’ request and disclosed to Tadd before auction. The ISA rated the building at 60 per cent of the New Building Standard (NBS), but this turned out to be a considerable overestimate. After completion of the purchase, Tadd obtained two Detailed Seismic Assessments (DSAs) from two different engineering firms, which assessed the NBS at 10 per cent and 30 per cent respectively.[3] A post‑purchase valuation considered the property should be valued as bare land.
[3]A rating below 34 per cent means the building is “earthquake prone” while a rating below 67 per cent means the building is “earthquake risk”: Ministry of Business, Innovation and Employment and others The Seismic Assessment of Existing Buildings: Technical Guidelines for Engineering Assessments (July 2017) at [A1.6] and [A6.5]; and see Building Act 2004, s 133AB.
Tadd brought proceedings in the High Court against the trustees of the Ruth Weine Family Trust in misrepresentation and common mistake. Tadd argued it was induced to purchase the building by the trustees’ misrepresentations as to the NBS rating, or alternatively, both parties acted under the common mistake that the building had a 60 per cent NBS rating in entering the contract for sale and purchase. The ‍trustees argued the ISA was simply an accurate statement of the engineer’s reasonable opinion, by way of an initial assessment only. As it contained appropriate caveats, it was not a misrepresentation. It followed that there was no mistake that went to the essential nature of the contract. The trustees also raised affirmative defences and, in the alternative, brought a third-party claim against NZCE.

The Courts below

In the High Court, Tadd succeeded in both causes of action.[4] Gwyn J found both parties were influenced to enter into the contract by a mutual mistake that the building was 60 per…

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: [2024] NZSC 183
Decision Date: 20 December 2024

CaseChat Overview and Summary

Tadd Management Limited sought leave to appeal a Court of Appeal decision that dismissed its claims for misrepresentation and common mistake in relation to a commercial property purchase. The Court of Appeal found that the Initial Seismic Assessment (ISA) rating of 60 per cent of the New Building Standard (NBS) was an expert opinion, not a statement of fact, and therefore not a misrepresentation or a common mistake. The High Court had previously found a mutual mistake on the NBS rating, awarding Tadd damages of $592,000 plus costs and interest. Tadd argued that the Court of Appeal's decision was unsound and that the real mistake was the effect of the NBS rating, which led both parties to believe the building was not earthquake prone.

The Supreme Court considered whether the appeal raised a matter of general or public importance, a substantial miscarriage of justice, or a matter of general commercial significance. The Court found that the ISA was an initial assessment with important caveats, and the Court of Appeal's determination that it was an expert opinion within its limitations was not challenged. The Court also found that Tadd could not reframe its case to suggest the real message of the ISA was that the building was not "earthquake prone," as this was not raised in the Court of Appeal or determined by the High Court.

The Supreme Court concluded that the proposed appeal did not meet the criteria for leave to appeal, as it did not raise a matter of general or public importance, a substantial miscarriage of justice, or a matter of general commercial significance, nor did it have sufficient prospects of success. The application for leave to appeal was dismissed, and Tadd was ordered to pay one set of costs of $2,500 to the respondents.

The final orders of the Court were that the application for leave to appeal was dismissed and that the applicant must pay the respondents one set of costs of $2,500.

Orders